John Price
Managing Director
AMI

AMI’s original 2026 forecast was not a boom call; it was a selectivity call. We expected modest real growth, stronger dollar-measured opportunities, rising trade, higher inbound FDI and sector-specific upside in financial services, health, nearshoring and consumption. At mid-year, that thesis still holds. Latin America is close to AMI’s baseline rather than breaking away from it, but the composition of growth has changed: Brazil and Peru look better, Mexico and Chile look weaker, and the region’s risk map has become more operationally important. The region, therefore, remains investable, but not simple: growth is concentrated in the countries and industries where commodity prices, public demand, digital infrastructure, energy investment or services consumption are strong enough to offset high real rates and political uncertainty.

Countries Growing Faster Than Expected

Brazil is the largest upside surprise. AMI already expected Brazil to lead the region’s dollar-measured GDP gains in 2026-2027, but first-half momentum in 2026 is firmer than many real-growth forecasts assumed. Brazil’s central bank raised its 2026 GDP estimate to 2% from 1.6%, citing agriculture and pre-election government stimulus. Inflation, high rates and fiscal concerns remain constraints, but agriculture, commodities, public demand, resilient consumption and a stronger currency have pushed Brazil ahead of the cautious forecast. For companies, Brazil’s upside is most visible in agribusiness supply chains, payments, healthcare, consumer staples, energy, mining services and infrastructure tied to public spending, while rate-sensitive housing, durable goods and leveraged retail remain more fragile.¹

Peru is also overperforming. The OECD sees 2.9% growth in 2026, BBVA forecasts 3.1%, and EY cites a BCRP projection of 3.2%. The upside comes from metal prices, construction, labor income, recovering consumption, lower rates and market expectations that post-election political alignment could unlock investment delayed by years of executive instability. Mining, construction inputs, equipment, logistics, banking and retail should benefit first, provided the next government reduces permitting delays and restores confidence in public-private execution.^{2 3 4}

Colombia is modestly ahead of expectations, but not yet a recovery story. The OECD projects 2.4% growth and BBVA 2.6%, helped by domestic demand and services. The weakness is investment, which remains constrained by policy uncertainty, inflation, tight financial conditions, security risks and regulatory pressure in energy and mining. A more market-friendly post-election path would lift 2027 expectations, but 2026 remains consumption-led. For the remainder of 2026, the better opportunities are in services, consumer finance, healthcare, telecom and selected infrastructure maintenance rather than large greenfield commitments in regulated sectors.^{5 6}

Guyana, Brazil and other energy or commodity-linked markets are also benefiting from external price shocks. AMI’s Strait of Hormuz scenario identified higher energy prices as positive for oil exporters but negative for the Caribbean, Central America, Chile and Uruguay. The IMF similarly warned that Middle East conflict would deepen the gap between energy exporters and importers.^{7 8}

What This Growth Means for You

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Countries Growing More Slowly Than Expected

Mexico is the clearest underperformer. AMI treated USMCA uncertainty as manageable noise, but at mid-year it is weighing more heavily on investment timing. The OECD now projects only 0.8% growth for the country, while BBVA cut its 2026 forecast to 1.2% from 1.8%. The drag on growth is a mix of trade-policy uncertainty, slower U.S. demand, fiscal consolidation, weaker public investment and caution among manufacturers waiting for clearer tariff and rules-of-origin signals. The underlying nearshoring logic is intact, but decisions on factories, suppliers, industrial parks and logistics capacity are being pushed out because executives need a clearer view of U.S. trade policy and Mexico’s domestic investment framework.^{9 10}

Mexico’s first sexenio year usually brings some investor caution while the new administration’s economic strategy takes shape. In 2026 that pause is deeper because Morena’s internal tensions have slowed the formation of a credible growth agenda, reinforcing private-sector delays.

Chile has disappointed. The OECD expects growth to slow to 1.7%, and the central bank cut its forecast range to 1.0%-1.75%. Weak copper output, agriculture, fishing, summer tourism and higher fuel costs have outweighed the investor optimism created by deregulation expectations. Chile remains institutionally strong, but first-half growth shows that politics cannot substitute for production recovery. Investors still like Chile’s rule of law, mining platform, renewable energy potential and infrastructure pipeline, but 2026 results will depend on execution in copper, permitting and energy costs more than on political sentiment alone.^{11 12}

Argentina’s recovery is real but narrow. The OECD projects 2.8% growth and BBVA 3.0%, led by energy, mining, agriculture and exports. Yet April activity grew only 1.6%, below expectations, as agriculture and mining were offset by contractions in fishing, manufacturing, wholesale and retail. Vaca Muerta, lithium and agribusiness are expanding, but households, manufacturing and retail remain pressured by high rates, austerity and slow wage recovery. Multinationals should separate Argentina’s tradable-resource opportunity from its domestic-demand weakness: upstream, export logistics and mining suppliers can grow while mass-market categories remain volatile.^{13 14 15}

The Dominican Republic and parts of the Caribbean have lost momentum. Early optimism pointed to 4.5% growth, but the World Bank now projects 3.6%. Tourism, exports and private investment still support the economy, but energy costs, debt concerns and a softer global backdrop have trimmed the upside. Hotels, airports, food services, healthcare and logistics remain attractive, but margins are more exposed to imported fuel and financing costs than early-year forecasts implied.^{16 17}

Open up Opportunities in Slow Growers

AMI’s custom Latin American forecasts can be structured to help your company find growth sectors in Mexico, Chile, Argentina, the DR and other modestly expanding markets.

MAP THE UPSIDE

For multinational investors, the SWOT is less a verdict than a capital-allocation filter. Latin America still offers scale, resources and sector-level growth that exceeds headline GDP, but returns depend on choosing countries where regulation, infrastructure, security and financing conditions allow demand to convert into revenue. The region rewards operators that combine optimism about demand with discipline around execution risk.

Top Five LatAm Risks in H2 2026

The second half brings external shocks and execution risks that will not affect all countries equally. The companies most exposed have high fuel intensity, regulated tariffs, long supply chains, government dependence, fixed assets in insecure locations or price-sensitive consumers. The common planning challenge is not whether Latin America grows; it is whether firms can protect margins and working capital when macro volatility arrives through fuel, tariffs, interest rates, security costs or logistics delays.

Five Risks. One Question: Are You Exposed?

Political, fiscal, and climate shocks are already hitting Latin America. AMI tells you which ones actually threaten your business.

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1. Renewed Middle East Energy Shock Low

A renewed Middle East energy shock is unlikely before the U.S. mid-terms, but the impact would be material. The driver is instability around oil and gas routes, especially the Persian Gulf and Strait of Hormuz. OECD and Reuters reporting linked the conflict to higher energy prices, inflation pressure and weaker global growth. Latin America would split between oil exporters such as Brazil, Guyana, Colombia, Ecuador, Mexico and Trinidad & Tobago, which should gain revenue, and importers in Central America, the Caribbean, Chile and Uruguay, which will face weaker consumption, higher subsidy bills and tighter monetary space.^{18 19}

The most vulnerable industries are transport, airlines, shipping, logistics, food distribution, retail, tourism, construction materials, petrochemicals, fertilizers, mining and energy-intensive manufacturing. Companies should treat energy as both a cost and demand risk, revisiting hedging, inventory buffers, surcharge clauses and pricing flexibility. They should also test country-by-country pass-through assumptions, because fuel importers with weaker consumers will not absorb price increases as easily as oil exporters with stronger fiscal receipts.

2. USMCA and Tariff Uncertainty High

USMCA and tariff uncertainty is high-likelihood because the 2026 review has become more contentious and tariffs are being used for industrial, migration, security and geopolitical leverage. The risk is not the collapse of North American integration; it is slower capital deployment, delayed supplier commitments and higher underwriting costs for manufacturing strategies. Mexico sought an early review to reduce uncertainty, while legal and tax advisers warn that rules of origin, market access, labor obligations and dispute mechanisms are now more difficult to plan around.^{20 21}

Mexico is most exposed. Nearshoring requires confidence in tariff treatment, Chinese-content rules, labor enforcement, energy policy and dispute resolution. The risk intensified when President Trump said in June 2026 that the United States might do better without USMCA. The most vulnerable industries are automotive, auto parts, electronics, aerospace, medical devices, appliances, machinery, metals, chemicals, plastics, logistics, industrial real estate and cross-border trucking. A stable tariff can be modeled; an unpredictable tariff regime changes site selection, supplier qualification, working capital and the cost of capital.²²

3. Fiscal Slippage and High Real Rates High

Fiscal slippage and high real rates are likely constraints on H2 growth. The driver is the collision of weak tax capacity, mandatory spending, pensions, subsidies, election politics and elevated borrowing costs. Brazil illustrates the pressure: its Treasury warned that fiscal targets become unfeasible from 2028 onward without new measures, while gross debt reached 81.1% of GDP and the 12-month nominal interest bill hit 8.48% of GDP.^{23 24}

The corporate impact is higher financing costs, weaker credit demand, delayed public payments and tax pressure. Construction, concessions, housing, durable goods, banks, fintech lenders, utilities, telecom, healthcare providers and government suppliers are most exposed. Governments with limited fiscal space may raise sector taxes, postpone contractor payments, pressure regulated tariffs or renegotiate concessions. Companies should incorporate higher local-currency discount rates, slower public collections and greater tax scrutiny into bids, acquisitions and capex approvals.

4. Political and Security Shocks Medium

Political and security shocks remain medium probability because the region faces dense electoral calendars, fragile coalitions, voter frustration and expanding criminal governance. Coface flagged Brazil, Colombia and Peru as consequential 2026 election markets. Security adds direct costs through guards, insurance, theft, extortion, route changes, lost inventory, executive protection and site closures. The IDB estimated direct crime and violence costs at 3.44% of regional GDP in 2022, with JPMorgan noting that private firms bear nearly 47% through security and mitigation spending.^{25 26 27}

The most vulnerable industries are mining, oil and gas, agribusiness, logistics, trucking, ports, retail, banking, telecom towers, power distribution, construction, tourism and consumer goods distribution. The impact is not limited to physical theft: security risk can raise insurance costs, constrain store hours, reduce route density, delay permits and damage brand reputation when violence touches tourist or retail corridors. Ecuador shows how criminal networks can move from narcotics into illegal gold, local governance and logistics; similar patterns affect parts of Colombia, Peru, Brazil, Mexico and Central America.²⁸

5. Climate and Logistics Disruptions Medium

Climate and logistics disruption is structurally more important. Drought, flooding, El Niño/La Niña volatility, low reservoirs, crop failures, port congestion, canal constraints, road blockades and weak inland infrastructure can quickly alter costs. Reuters reported FAO warnings that a powerful El Niño was developing, with Central America’s Dry Corridor and the Caribbean among high-risk zones.²⁹

The Panama Canal drought showed that logistics is strategic, not back-office. Reuters reported that the Canal Authority did not plan 2026 passage restrictions but was monitoring El Niño drought risk; Woodwell linked the 2023-2024 disruption to low Gatún Lake levels driven by El Niño and climate change. The risk affects agribusiness, food, beverages, mining, energy, logistics, ports, shipping, retail, construction, tourism and cold chain. Companies should diversify ports, pre-negotiate alternative routes, build flexible inventory buffers, map water exposure and include canal scenarios in landed-cost models. Water availability should be reviewed not only for owned facilities but also for contract manufacturers, suppliers, agricultural inputs, mines, power sources and ports.^{30 31}

Implications for corporate planning: These five risks should shape H2 2026 budgets through flexible pricing, supply-chain redundancy, political monitoring, security mapping and country-specific financing assumptions. None is likely to stop regional growth, but each can quickly alter margins, working capital, capex timing and competitive position. The winners in H2 2026 will be firms that preserve optionality: they will stage investments, diversify logistics, price dynamically, finance locally where possible and treat political and security intelligence as operational inputs rather than background noise.

Next Steps

Contact us to find out how we can help your company adjust to what’s ahead in the second half of 2026 in Latin America. We can help you with strategic planning, stakeholder mapping, refining your go-to-market strategy, market feasibility, voice of the customer, and many other concerns you may need to resolve.

This is who we’ve helped before.

This is how we did it.

Sources:

1. Reuters, “Brazil’s central bank sees 2028 inflation close to target despite near-term pressures” June 25, 2026. ↩︎
2. EY Peru, Economic and Business Report Q1 2026. ↩︎
3. BBVA Research, Peru Economic Outlook, June 2026. ↩︎
4. OECD Economic Outlook, Peru country note, June 2026. ↩︎
5. BBVA Research, Colombia Economic Outlook, June 2026. ↩︎
6. OECD Economic Outlook, Colombia country note, June 2026. ↩︎
7. Reuters, “IMF says Middle East war to deepen economic divide in Latin America, Caribbean,” April 17, 2026. ↩︎
8. AMI forecast file: Strait of Hormuz / energy price scenario by country. ↩︎
9. BBVA Research, Mexico Economic Outlook, June 2026. ↩︎
10. OECD Economic Outlook, Mexico country note, June 2026. ↩︎
11. Reuters, “Chile central bank trims GDP growth estimate, raises inflation forecast,” June 17, 2026. ↩︎
12. OECD Economic Outlook, Chile country note, June 2026. ↩︎
13. Reuters, “Argentina economic activity grows less than expected in April,” June 29, 2026. ↩︎
14. BBVA Research, Argentina Economic Outlook, June 2026. ↩︎
15. OECD Economic Outlook, Argentina country note, June 2026. ↩︎
16. World Bank Macro Poverty Outlook, Dominican Republic, 2026. ↩︎
17. Americas Quarterly, Dominican Republic: A 2026 Snapshot, January 2026. ↩︎
18. Reuters, “IMF says Middle East war to deepen economic divide in Latin America, Caribbean,” April 17, 2026. ↩︎
19. AMI forecast file: Strait of Hormuz / energy price scenario by country. ↩︎
20. Thomson Reuters, “USMCA on the tightrope: Mexico’s challenges with the US and Canadian trade review,” January 30, 2026. Accessed July 2, 2026. ↩︎
21. Reuters, “Mexico hopes early review of USMCA can end uncertainty, revive flagging investment,” May 30, 2025. Accessed July 2, 2026. ↩︎
22. Reuters, “Trump says US would do better without USMCA trade agreement,” June 17, 2026. Accessed July 2, 2026. ↩︎
23. Reuters, Marcela Ayres, “Brazil needs new fiscal measures as targets become unfeasible from 2028, Treasury says,” June 30, 2026. Accessed July 2, 2026. ↩︎
24. Reuters, Marcela Ayres, “Brazil’s gross debt tops forecasts as interest burden mounts in May,” June 30, 2026. Accessed July 2, 2026. ↩︎
25. Coface, “The Three Key Political and Social Risks in 2026,” January 29, 2026. Accessed July 2, 2026. ↩︎
26. JPMorgan Private Bank, “The economic cost of insecurity: Can overcoming instability drive opportunity in Latin America?” January 5, 2026. Accessed July 2, 2026. ↩︎
27. – Inter-American Development Bank, “High Crime Costs Burden Latin America and the Caribbean,” November 11, 2024. Accessed July 2, 2026. ↩︎
28. The Times, “Deep in Ecuador’s forests, the cocaine gangs have a new trade: gold,” June 2026. Accessed July 2, 2026. ↩︎
29. Reuters, “El Niño is coming. At the FAO we know where drought will hit hardest,” June 29, 2026. Accessed July 2, 2026. ↩︎
30. Woodwell Climate Research Center, “Drought, Climate, and the Panama Canal,” February 20, 2024. Accessed July 2, 2026. ↩︎
31. Reuters, “Panama Canal not planning to curb ships’ passage for 2026 despite drought threat,” May 15, 2026. Accessed July 2, 2026. ↩︎

John Price

John Price is the Managing Director of Americas Market Intelligence. With 20 years of experience in Latin American market intelligence consulting, John has supervised nearly 1,200 client engagements and advises clients in more than 20 countries across Latin America. John’s areas of focus for AMI Perspectiva include Latin America’s natural resources, logistics and industrial products industries.

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