Economic Strength: How Latam Has Become a Fundamental Partner

Today’s commercial and geopolitical landscape has created a climate of uncertainty across the hemisphere. Longstanding allies find themselves at odds, and the economic bridges built over decades are tested every day by political agendas that no longer align. Even so, Latin America has shown resilience and has grown in recent years despite the circumstances—something that is key for a broader macroeconomic recovery in the region.

According to ECLAC (the UN’s Economic Commission for Latin America and the Caribbean), economic growth in Latin America is projected at 2.3% for 2026, in a context of moderate but steady recovery. Likewise, the World Bank expects the region to grow 2.5% in 2026, driven by more resilient domestic demand despite global pressures. In its most recent report, the IDB identifies several essential reforms—productivity, intraregional integration, labor formalization, and efficient public spending—as engines for capitalizing on an opportunity for sustained growth. Even the OECD reports rising trust in public institutions in the region, tied to improvements in integrity and civic participation.

Taken together, these factors show the potential Latin America holds as an investment destination and as a strategic partner. It is in Latam’s unity—and in its pursuit of shared goals—that its relationship with countries like the United States can strengthen, on the basis of parity and mutual growth.

The Regional Landscape: Governance as an Engine of Stability

One of the strongest contributors to regional stability has been fiscal reform and more robust reserves, according to the IDB—factors that have allowed Latin America to withstand external shocks. But beyond macroeconomic safeguards, what is making a difference now is the quality of its institutions: more transparent governments, more predictable rules, and an environment that is friendlier to private investment.

For example, trust in public institutions has been central in converting capital into development. An OECD survey shows that Latin America has registered increases in citizen trust in government, linked to improvements in accountability and civic participation. When people feel that rules are clear and fairly applied, not only does the State gain legitimacy—it also becomes more likely that companies will invest safely and for the long term.

Other factors worth noting to understand Latin America’s positive momentum include:

• Capital and efficient public spending: The IDB report highlights how improving spending efficiency—such as reducing leakages in energy subsidies or increasing transparency in public procurement—could free resources equivalent to up to 1.8 percentage points of GDP, boosting economic growth.
• Fiscal transparency: The OECD’s report on tax transparency shows sustained progress in collaboration among Latin American countries to share fiscal information, strengthening revenue collection and reducing evasion.
• Innovation and transformative production: The OECD’s Latin American Economic Outlook 2025 states that the region can make a productive leap by adopting industrial development policies that are inclusive, low-carbon, and favorable to both public and private investment.

All of this contributes to a virtuous cycle: more investment, more formal employment, more sustainable growth. Carlos Felipe Jaramillo, the World Bank’s Vice President for Latin America, notes that the region must move forward with “bold, practical reforms that increase productivity and improve the business climate” to generate jobs and new opportunities.

Reports from the IDB and the OECD align on another point: strengthening governance and transparency is not just a moral stance—it's an effective economic strategy, because these policies:

• Attract private capital, as investors value lower institutional risk.
• Facilitate domestic financing, since tax collection improves when there is confidence in the system.
• Encourage business formalization, as entrepreneurs perceive a more stable and fair environment to operate in. Enable long-term policies—such as productive transformation or green innovation—thanks to durable and predictable rules.

A sample of this is the most recent figures from ECLAC, which report that foreign direct investment (FDI) in Latin America and the Caribbean reached US$188.962 billion in 2024, representing a 7.1% increase compared to the previous year. A key data point from this report is the role of the United States, which consolidated its position as the largest investor in the region, contributing 38% of the total FDI registered that year.

This strong U.S. presence not only reflects the confidence of companies with a longstanding footprint in the region—it also directly supports regional macroeconomic stability. Much of that capital came from companies reinvesting their profits locally. That reinvestment is particularly valuable because it reinforces existing commercial and productive ties.

Moreover, U.S. investment in Latin America is diversified: it is not limited to raw materials, but also drives manufacturing, productive sectors, and energy. This contributes to productive development, employment, and the modernization of the Latin American economy, turning FDI into a strategic tool, just as ECLAC recommends for more inclusive development policies.

The message is clear: governance and transparency are not obstacles to growth—they are the foundation of it. When countries establish rules that are reliable and apply them consistently, they create an environment in which both citizens and investors participate with confidence.