Regional Macroeconomic Balance 2026-I

Economic Studies Department

Sergio Olarte

This analysis, prepared by our Economic Studies Department, examines the main risks and opportunities facing Latin America in the second half of 2026.

Some key highlights from the report:

• The first half of 2026 was marked by heightened geopolitical instability, driven by the conflict in the Middle East. This environment was further compounded by the reconfiguration of U.S. trade policy and a more cautious Federal Reserve in the face of persistent inflationary pressures, contributing to elevated global uncertainty.
• On the political front, a growing anti-incumbent sentiment has reshaped the regional landscape, with voters increasingly favoring platforms centered on security and public order. Brazil’s presidential election and the U.S. midterm elections will be key tests of whether this trend gains further traction during the second half of the year.
• Meanwhile, the energy shock and the potential emergence of a severe El Niño event represent the region’s main macroeconomic risks, given their potential impact on inflation, agricultural output, hydroelectric power generation, infrastructure, and both fiscal and external accounts.
• Against this backdrop, the rating agencies maintain a constructive view of the region, while highlighting fiscal consolidation, debt sustainability, institutional strength, and the implementation of structural reforms as the key challenges ahead.
• Taken all together, the region enters the second half of 2026 from a position of relative resilience. However, its performance will largely depend on the evolution of external shocks, climate-related risks, and each country’s ability to preserve macroeconomic stability.

Read the full report here: Regional Macroeconomic Balance 2026-I