MASTERCARD ECONOMICS INSTITUTE

Mastercard Economics Institute 2026 Outlook: Moderate Expansion and Easing Inflation for Latin America

DECEMBER 15, 2025 | MIAMI, FLORIDA

The Mastercard Economics Institute  (MEI) released its Economic Outlook 2026, revealing how accelerating policy shifts and rapid AI adoption are reshaping global growth amid rising fragmentation.

Globally, MEI expects real GDP growth to ease marginally to 3.1 percent in 2026, compared to an estimated 3.2 percent in 2025. On the inflation front, MEI expects an easing of global inflation to 3.4% in 2026 from the expected 3.9% in 2025. The global consumer will remain savvy, focusing on tech-enabled and value-conscious spending. MEI expects consumers to prioritize “meaningful moments” such as travel and live events while remaining price sensitive for many necessary goods.

"Latin America’s consumers are proving remarkably adaptive as we head into 2026, navigating moderating growth, shifting inflation, and evolving policy landscapes. Despite headwinds, resilient labor markets and targeted fiscal support are keeping consumption at solid pace, especially as households respond to changing rates and global headwinds”, said Gustavo Arruda, Chief Economist, Mastercard Latin America and the Caribbean.

The annual Economic Outlook report features three major trends to watch in 2026: global trade realignment, AI adoption and fiscal expansion, and small businesses adapting to macro changes:

Shifting trade relationships: A wave of tariff announcements reshaped global trade. MEI expects that this reorganization of global trade will continue to reshape trade flows, inflation dynamics and consumer spending. Goods from the Chinese Mainland are fueling disinflation in countries that have ramped up imports from mainland China, while the U.S. faces inflationary pressures due to costlier sourcing alternatives. MEI believes these trends will persist in 2026 and potentially deepen.

Accelerated AI adoption and fiscal expansion: Businesses are investing heavily in AI infrastructure, while governments boost strategic spending on defense, digital and green initiatives. These trends will reshape investment priorities, inflation dynamics and global supply chains.

The shift in SMEs: SMEs are navigating trade disruptions and tariff pressures. MEI finds that tariffs are disproportionately affecting U.S. SMEs as compared to larger businesses. Yet, digital tools are boosting resilience, streamlining operations and enabling online-first models. Broader tech adoption and niche demand position agile, tech-forward SMEs to compete effectively and capture growth in high-value services globally.

 Regional Highlights:

Brazil

• GDP growth deceleration & lower interest rates - Brazil’s real GDP growth will slow to 1.5% in 2026, down from 2.2% in 2025 and 3.4% in 2024. Due to softer growth and better-than-expected inflation, the Central Bank is expected to cut rates throughout 2026. MEI projects that the year-end policy rate will be 12%. 
• Resilient job market and fiscal transfers should support private consumption resilience –Real private consumption is projected to grow 2.2% in 2026, outpacing overall GDP. Consumption is likely to shift modestly toward services, while durables may remain sensitive to financing conditions.
• Agribusiness stands out – Agribusiness has been a bright spot and a source of regional divergence. MEI expects decent growth in agricultural hubs such as the Central-West and parts of the South and Southeast. Gains are likely to be more modest in urban, services-heavy regions.

Mexico

MEI projects a modest recovery for Mexico’s economy in 2026, with baseline GDP growth expected to reach 1.3%, up from the 0.2% forecast for 2025. The 2026 FIFA World Cup may provide a temporary but meaningful boost to private consumption. However, this surge could also boost prices. According to MEI’s baseline scenario, inflation will reach approximately 3.8% at the end of 2026.

Argentina

After a rebound in 2025, MEI forecasts 3.5% GDP growth in 2026 and 20% year-end inflation, with a downside bias if disinflation continues. Investment sentiment will hinge on post-election reform execution. Household demand should normalize from 2025’s surge, supported by improving confidence and gradual policy easing.

Chile

MEI projects 2.0% GDP growth and inflation converging toward 3.5%. Following 2025 rate cuts, the central bank is likely to remain cautious, balancing softer core goods inflation against persistent services inflation. New government policies will be closely watched, while demand remains a swing factor for metals and forestry exports. The president and congress take office in March.

 Colombia

MEI expects a rebound to 2.8% growth, inflation at 4.3% and a policy rate of 8.50% under gradual easing. As 2026 is an election year, fiscal and inflation uncertainty may rise. Leaders could reduce volatility by showing clear signs of responsibility. Private consumption remains the main growth driver, though capital expenditure may be delayed. Congress convenes in July, and the presidential inauguration is scheduled to take place in August.

 Peru

MEI forecasts 2.8% GDP growth, inflation at 2.2% and an easing bias in rates. The April election may introduce currency volatility and business uncertainty, though targeted public investment and strong mining pipelines could provide a buffer. Trade ties with the Chinese Mainland present a double-edged sword for metals prices and volumes. The president and congress assume office in July. 

To read the full report click here.