Report published September 4, 2026

LatAm Views: Low Growth Gear, High Inflation Inertia – Goldman Sachs Research

Goldman Sachs · September 4, 2026

Goldman Sachs forecasts LA7 economic growth to slow to 1.9% in 2026 amid softening activity in Brazil, payback in Mexico, and earthquake disruptions in Colombia. Regional inflation remains sticky with LA-IT5 projected to rise to 4.8%, driven by resilient services prices and prompting divergent central bank paths.

Read the full report

Read the remaining 4 pages

View Report Sign in

Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.LA7 real GDP growth is slowing to an expected 0.3% qoq sa in 3Q26 and 1.9% overall in 2026, driven by fading momentum in Brazil, payback in Mexico, and earthquake disruptions in Colombia.
2.Regional inflation remains sticky due to persistent services inflation (5.3% yoy) and stubborn core dynamics around 4.4%-4.5%, lifting 2026 LA-IT5 inflation forecasts to 4.8%.
3.Monetary policy trajectories across the region are diverging: Copom in Brazil is positioned to cut rates by 25bp to 13.75%, Banxico is holding steady at neutral, Colombia's MPC is adopting a high-for-long stance at 12.0%, and Peru is expected to hike 25bp.

1. LatAm Real Activity: Hot and Cold 1H2026.
2. LatAm Real Activity: Tepid 2H2026 Start.
3. LatAm Inflation: Sticky Core, Steamy Services, Soft Tradables/Goods.
4. Brazil: The Business Cycle Is Turning but a 2027 Recession Looks Unlikely.
5. Brazil: Weak Growth Allows Copom to Normalize Further.
6. Mexico: Comfortably Cruising at Neutral.
7. Monetary Policy: Colombia (Finger on the Trigger); Peru (Ready to Fire).
8. Brazil: Can Deeply Entrenched Polarization Be Broken? Unlikely.
9. Colombia: Fiscal Shock & Awe.
10. Argentina: Modest Narrow-Based Growth Against a Balanced Macro.

Report data

Exhibit 7: Receding Fuel Price Spike - LA-IT5 Inflation Heatmap (Simple Average)

Metric	Estimate	Context
LA7 Real GDP Growth	0.5%	Sequential pace broadly unchanged from 4Q25.
LA7 Real GDP Growth Forecast	1.9%	Down from 2.2% in 2025.
LA-IT5 Headline Inflation	4.2%	LA-IT5 headline inflation running persistently in the 4%-handle.
LA-IT5 Services Inflation	5.3%	Running above 5% since March 2026, compared to 4.3% at end-2025.
Brazil Selic Policy Rate (Current)	14.00%	Selic policy rate at restrictive level ahead of the Sept 16 Copom meeting.