Central and Latin America: Country Risk Ratings

Argentina (ARG)

Argentina’s overall risk remains medium high.  President Javier Milei’s administration’s approval ratings have fallen below 40%, as economic growth is concentrated in export sectors and households are being squeezed by negative real wages.  Additionally, the government has been involved in a number of scandals, with which voters are not happy about given Milei’s promises on ending corruption. We think the October/November 2027 presidential election could be close, though opposition parties need to unify around a credible candidate and also shake off voter concerns about major corruption in previous administrations. It is also worth remembering that polls underestimated Milei’s support ahead of last October’s elections. Meanwhile, Milei’s relationship with the Trump administration remains very good, with Milei having supported Trump’s pivot toward the Americas in the U.S. security strategy, leading to a new bilateral trade deal agreed with the U.S. earlier in the year.

Economically, Argentina’s GDP growth is projected to maintain momentum from the 2023-24 recession with a positive growth of 3.5% in 2026, forecasted by the IMF. Growth also sits in a positive position due to the continued reassurance of Argentina’s move towards macroeconomic stability and reform, a well-performing agricultural sector and investment into the energy sector. Additionally, Argentina continues to benefit from the 4-year USD20bn IMF Extended Fund Facility in April 2025. This leaves the inability of the government to provide stimulus at a medium risk rating. However, Argentina lies as the IMF’s largest debtor and still has an overall government debt projected to be 70.4% of GDP in 2026, though with further decreases likely 2027-28.  Sovereign non-payment risk stays at medium. Inflation has also been on a downward trend since 2024 but progress has slowed with an increase in energy and utility prices and the IMF now forecasts it to be 30.4% in 2026, according to April 2026 World Economic Outlook (WEO) report. Finally, the risk of doing business continues at a high level.

Bolivia (BOL)

Bolivia maintains its overall country risk rating of high, while its economy deepens into a crisis following the geopolitical uncertainty across the globe. Current President Rodrigo Paz ended two decades of MAS rule in November 2025 and immediately declared an economic, financial, energy and social emergency across the nation. President Paz had followed his declaration with the cutting of Bolivia’s long-standing fuel subsidies, the slashing of the country’s budget as well as developing negotiations with the IMF over a USD 3.3 bln Extended Fund Facility (EFF). Political interference and legal & regulatory risk both remain highly volatile at very high, despite President Paz’s reform efforts and the U.S.’s welcoming these changes, stating that they will encourage investment. In addition, Bolivia’s government had also announced a proposed reform that would allow private companies to participate in the generation, export and import of energy products, effectively ending the monopoly held by the state-run company ENDE. Bolivia’s new energy minister, Marcelo Blanco, expressed the government’s aim to attract international investment and the country’s shift away from its reliance on natural gas exports. Political violence remains medium-high, while investigations continue into alleged inflated oil-contract prices between state energy company YPFB and energy trader Trafigura during a national economic and fuel crisis. According to the IMF’s recent April 2026 evaluation, Bolivia’s growth outlook is pointing towards a contraction in GDP growth at -3.3% in 2026, as the hydrocarbons sector remains in a weakened position. However, other sectors have shown some promise in Q1 of 2026, in particular, electricity generation as well as agricultural and agro-industrial activity have provided positive performance in times of economic uncertainty. Inflationary pressures, unfortunately for Bolivia, are forecast to rise significantly higher than previous years, as the Middle Eastern conflict is creating an unsustainable picture for fuel and energy prices. The IMF have indicated that inflation could reach up to 20.7% in 2026. Therefore, the risk of doing business is assessed at a high rating. Likewise, sovereign-nonpayment risk is also to remain high, while exchange transfer maintains its rating of medium-high, which is mainly due to the low foreign exchange reserves and a substantial government debt burden. The IMF foresees a high government debt to GDP ratio of 102.7% in 2026.

Brazil (BRA)

Overall risk in Brazil remains at a medium rating. The biggest issue remains the outcome of the October presidential election. The most likely 2nd round runoff is between President Lula and right-wing candidate Flavio Bolsonaro, with the economy and crime being the key voter issues.  Bolsonaro has lost momentum after reports that he sought a loan from the owner of Banco Master that has been involved in a scandal.  Opinion polls now suggest a close race.  Markets are also watchful for any extra fiscal giveaways from the Lula administration. Elsewhere, given Trump’s dislike of Lula, Brazil is looking to build closer ties with other countries across the world.  The EU is keen to work with Brazil on its large rare earth mineral deposits (2nd only to China), which Trump wants to exploit if Bolsonaro wins. Oil exports to China and India have also increased since the start of the Iran war.  The critical long-term economic issue is the budget deficit and government debt trajectory, with the latter forecast at 96.5% of GDP in 2026, according to the IMF. While the government has pledged a primary surplus from 2026, debt servicing costs are now 7% of GDP. Thus, sovereign non-payment risk is medium-high. If fiscal consolidation is not seen post-election, we think it could cause domestic financial tensions in the coming years. The long-term fiscal problems also mean that the risk of doing business remains high. Economic growth is projected by the IMF to slow to 1.9% in 2026, as the lagged effects of ultra-restrictive monetary policy continue to feedthrough (the central bank has started cutting but is cautious due to Iran war energy price shock). The IMF forecasts 4.0% inflation in 2026 and 3.4% in 2027, respectively.

Chile (CHL)

Overall risk in Chile continues to be assessed as medium-low, following a sharp shift to the right in another political transition. Public frustration over rising crime, increased migration and weak economic stimulus have ultimately led to conservative candidate José Antonio Kast’s 58% victory over the leftist coalition opposition. Sworn in on March 11 2026, President Kast’s economic plans involve the flexibility of labor laws, cuts in corporate tax, less regulation and encouraging investment into Chile’s well-renowned copper industry. Political violence and political interference, both remain medium-low. Despite Chile being considered one of the safest countries in Latin America, fears over crimes, organized gangs and immigration have risen in recent years - issues Kast is attempting to address. One of Kast’s proposals is already underway, with trenches being dug along Chile’s northern border with Peru in efforts to crack down on illegal migration and unauthorized entries. The President has also expressed ambitions to create a specialized enforcement body similar to the U.S.’s Immigration and Custom Enforcement. In terms of international relations, Chile have reaffirmed their close ties with the U.S., signing mining and security agreements in late April. The security deal, in particular, aims to strengthen capacity to address the ongoing drug-trafficking crisis and includes USD 1 mln in allocated security funding from the U.S. Additionally, ties are expected to be maintained with China given Chile’s reliance on China’s imports, particularly in copper, and exports. Legal & regulatory risk is considered to have a rating of medium-low.

In terms of the Chilean economy, the IMF’s updated April 2026 outlook highlights the country’s resilient GDP performance despite global headwinds, projecting growth of 2.4% in 2026 and 2.6% in 2027. These outcomes of course depend on changes in external conditions. The world’s largest copper producer and second largest-lithium producer have been benefiting from the inflated copper prices since the U.S. initiated its conflict with Iran. However, Chile is also one of the largest importers of oil in Latin America due to limited domestic production, creating significant economic headwinds.   Inflation is more than likely to exceed the IMF’s 2.9% 2026 forecast as well into early 2027, given the current uncertainty surrounding oil prices at this current point in time. In the light of this, Chile’s Central Bank held its policy rate at 4.5% in its late April meeting, stating that the ongoing conflict in the Middle East is worsening the forecast for economic activity and inflation. The risk of doing business is currently rated at medium low. Similarly, exchange transfer and sovereign non-payment risk both are a medium-low risk rating, with the IMF forecasting government debt to GDP to reach 42.5% in 2026 and 44.4% in 2027. The debt ratio is expected to rise steadily through to 2031.

Colombia (COL)

Colombia, who is nearing a highly consequential presidential election, continues to face surging guerilla attacks, keeping its overall country risk unchanged at medium. President Gustavo Petro, a former member of another rebel faction, had promised his nation total peace since his election in 2022. Since assuming office, homicides, kidnappings and massacres have escalated, while the decade long internal conflict - having claimed approximately half a million lives – continues to shape the upcoming presidential vote on the 31st May 2026. Political violence remains medium, while tensions build around the presidential election and an outbreak of terrorist attacks has Colombia on edge. Petro in early March had confirmed 27 people were found dead along its shared border with Ecuador, as his Ecuadorean counterpart, Daniel Noboa, confirmed his country had bombed the hideouts of narco-terrorist groups. Colombia’s drug trafficking crisis remains in a critical situation creating friction, in particular, with the U.S. Political interference and legal & regulatory risk both continue to be assessed as medium-high. Early this year, strained relations with the U.S. weighed upon Colombia’s politics, as U.S. President Trump accused President Petro of fueling the movement of cocaine into the U.S. However, a constructive meeting between the two trading partners had eased tensions, as Petro requested Trump to support his aim of capturing international drug traffickers and mediate tensions with Ecuador’s President. Tensions with Ecuador stem from its failure to implement effective security measures along its shared border, while Ecuador threatens Colombia with 100% tariffs following President Petro’s reversal on a similar proposal.

Economically, the IMF projects a 2.3% GDP growth rate in 2026 and 2.5% in 2027. Robust private consumption and a slow improvement in infrastructural and construction investment sustained reasonable growth, although geopolitical tensions have created much uncertainty throughout industries. Oil production, at least in the short run, has absorbed shocks caused by the conflict in the Middle East following a rise in energy prices. In addition to this, Colombia is in discussions with Venezuela over a possible increase in bilateral trade and the potential provision of electricity to western Venezuela. Inflation is expected to remain above the central bank’s 3% target, with the IMF forecasting 5.9% in 2026 and 5.2% in 2027. The inflation picture prompted a 100bps tightening of Colombia’s monetary stance to 11.25%, due to persistently high energy prices. Therefore, the risk of doing business is unchanged at a rating of medium-high. Government debt to GDP is expected to remain elevated, with many debt management operations planned throughout 2026 ahead of the upcoming change in government in August 2026. Already saving USD 5.5 bln in debt service payments in 2025, such operations are aimed at easing fiscal pressures. Sovereign non-payment risk remains medium- high, following the IMF’S government debt forecast of 60.9% of GDP in 2026 and 61.3% in 2027. Exchange transfer’s rating has worsened to medium risk.

Cuba (CUB)

Cuba has maintained its high overall country risk. The United States has effectively imposed a blockade upon Cuba, threatening sanctions on countries which attempt to supply fuel. This policy, tied to President Trump’s aim of regime change, has caused a deepening nationwide crisis across Cuba. Negotiations between the U.S. and Cuba have taken place; however, Cuban officials have made it clear that they will not facilitate U.S. interference in internal affairs. Political interference remains very high, while political violence is assessed at medium despite violent protests during Cuba’s worst rolling blackout in decades. In terms of Cuba’s international support, Mexico has argued its right to supply Cuba with oil, as well as stepping up the supply of humanitarian aid for the embargoed nation alongside Brazil and Spain. Russia has re-affirmed its support towards Cuba following its last shipment of 700,000 barrels of oil in late March 2026. Legal & regulatory risk is unchanged at a high rating. Prices at the pump have now been adapted to reflect the ‘actual cost’ of a limited supply of diesel and gas. Inflationary pressures are also driven by the ongoing economic crisis, with severe supply deficits in essential goods. Therefore, the risk of doing business remains very-high, while supply chain disruption is at the forefront of discussion and carries a high-risk rating. Lastly, sovereign non-payment risk is assessed at medium-high, whereas exchange transfer risk is regarded to have remained high. The island’s highly depleted economy has placed significant pressure on its debt burden, leaving it unable to meet obligations. Government debt owed to Spanish companies is continuing to rise.

Dominican Republic (DOM)

Overall risk in the Dominican Republic has been upheld at its medium rating. The president of the Dominican Republic, Luis Abinader, was first elected in 2020 and won re-election in May 2024 with the centrist Modern Revolutionary Party (MRP), where he was expected to combat the long-standing issue of tax evasion. Two years on from his re-election, President Abinader is facing protests surrounding mining projects and cooperating with the U.S. in its efforts to curb the transportation of narcotics across the Caribbean. Political interference and political violence both remain medium. The nation which shares the island of Hispaniola with Haiti, had re-opened its airspace two years after closing It in March 2024 due to high levels of insecurity in the neighboring nation. Such a move opens the possibility of solidifying relations and boosting economic ties between the two countries. While the Dominican Republic advocate international intervention to return peace to Haiti, concerns persist regarding illegal immigration and the strain on national resources. In consideration of this, legal & regulatory risk remains medium-high.

Economically, the IMF have forecast a 3.7% level of growth in 2026 and 4.4% in 2027. Strong foreign direct investment (FDI), robust remittance inflows, and a rebound in its tourism and real estate sectors have positioned the nation as one of the top-performing economies in Latin America. In addition to such advancements, discoveries have uncovered the Dominican Republic’s extensive reserves in rare earth deposits - exceeding 150 mln tons - in which the U.S. has shown significant interest. In terms of inflation, the IMF forecast inflation at a three year high of 5.1% in 2026 then easing slightly above the central bank’s 3% ± 1% target at 4.5% in 2027. The outbreak of the conflict in the Middle-East had created a higher domestic price for fuel and energy, particularly as the Dominican Republic continues to be a net importer of hydrocarbons. Therefore, the risk of doing business is assessed at a medium rating, following the government implementing fuel price freezes and higher energy subsidies adding to fiscal pressure. Meanwhile, sovereign non-payment risk is also considered to have a medium risk rating, as efforts are ongoing with a fiscal consolidation plan to stabilize debt levels. Government debt to GDP remains moderate at a projected 58.3% in 2026, while reduction is expected in time to come with a 56.7% rate in 2027. Exchange transfer is also unchanged but at a medium-low rating.

Ecuador (ECU)

Ecuador maintains its overall country risk of medium-high despite ongoing regional and geopolitical uncertainty. Sworn in for a full four-year term in May 2025, President Daniel Noboa has set his country on a more positive course. Political stability has improved somewhat, though fragility persists due to his party’s reliance on coalition support. Political violence and political interference both remain medium-high, following Ecuador recording the highest rate of homicide in the entirety of Latin America. President Nobao’s militarized response to crime, as well as plans for maximum security prisons, has received some backlash but seems to be having a positive effect in reducing the country’s homicide rate. In March 2026, homicides had fallen approximately 28%, following the implementation of a localized curfew in key drug trafficking corridors and the arrest of several major criminal figures. In terms of regional relations, the Andean Community Trade Bloc had ordered both Ecuador and Colombia to remove any measures restricting trade between the two countries, after each country raised tariffs against the other. The Ecuadorian President had raised tariffs upon Colombia as he believed the neighboring nation was not doing enough to combat drug trafficking along its shared border, which Colombia President Petro responded by formalizing tariffs and suspending electricity exports. This event follows the joint U.S. and Ecuadorian operations to combat the ongoing drug trafficking crisis. Legal & regulatory risk is assessed at high.

According to the IMF, Ecuador’s economy has faced significant headwinds, but projections indicate a period of reasonable stabilization, with GDP growth expected to grow by 2.5% in 2026 and 2027. Ecuador, whose economy is predominantly driven by petroleum exports and agricultural commodities, is now seeking to expand its opportunity in its unexploited mineral reserves. In February 2026, a reform was passed that includes modifications to environmental permitting processes to enable potential investment into Ecuador’s mining industry. In the light of such changes, a USD 1.7 bln mining deal was signed with China’s CMOC Group, while Canadian mining company Ludin Gold is aiming to invest USD 100 mln to prolong the life of its Fruta del Norte mine in Ecuador. Inflation has been hit by higher fuel and food prices linked to the conflict in the Middle East, contributing to the IMF’s forecast of 2.9% for 2026. However, Ecuador’s dollarized economy has largely helped contain broader price pressures. Therefore, the risk of doing business remains high, while the government’s inability to provide stimulus has maintained its medium rating. Government debt to GDP is expected to improve, but remains elevated, while the government continues to show its commitment to the IMF-backed reforms allowing Ecuador to return to the capital markets, however, liquidity risks persist. Sovereign non-payment risk and exchange transfer risk both are assessed at a medium rating.

Haiti (HTI)

Overall risk in the Caribbean country of Haiti continues to be considered as high, while its government remains quite vulnerable in times of political instability and gang violence. The Transitional Presidential Council’s attempt to oust Prime Minister Alix Didier Fils-Aimé failed and its mandate had come to an end on the 7th February 2026, which means PM Fils-Aimé had replaced the transitional council’s role as Haiti’s sole leader. He now faces an immeasurable task of organizing elections with the backdrop of deadly gang violence, huge civilian displacement and food insecurity across the nation. Political violence remains at a high-risk rating. In late March 2026, the area of Jean-Denis was attacked by Gran Grif gang, ultimately leaving an approximate 70 people dead. The group later repositioned in the nearby Pont Benoit, located in the same Artibonite region. A limited security response within Haiti has triggered Chad’s intention to deploy an 800-member contingent of police officers and gendarmes, alongside the UN-backed Gang Suppression Force. Additionally, a U.S. private military company and the UN-backed forces have intensified their attacks on armed gangs that control a large proportion of Haiti’s capital. Political interference and legal & regulatory risk both remain very high.

Economically, the IMF forecast a 1.7% decline in GDP growth through 2026, while projections are for +0.5% in 2027. The deepening Iran War, however, is creating even more economic and social challenges for Haiti, as international oil prices surge (29% increase in cost of gasoline and 37% increase in the cost of diesel) worsening the already troubling acute food insecurity. Therefore, supply chain disruption is unchanged at a high-risk rating. Pressures surrounding such oil prices have been partially offset by strong remittance inflows despite the uncertainty regarding Haitian’s Temporary Protected Status (TPS) in the U.S. The country’s current account is expected to stay balanced in 2026, while budget execution has remained quite uneven. The government’s inability to provide stimulus is currently assessed at a medium rating, while the risk of doing business remains very high. Inflation had eased in the recent months of 2026 to 22.21% year-on-year, compared to an inflation rate of 32% towards the end of 2025. Finally, sovereign non-payment risk is unchanged at medium high, while exchange transfer is medium. 

Honduras (HND)

Overall risk in the Central American state of Honduras has been maintained at medium-high, despite great political change. The presidential election of November 2026 had been prolonged by growing tensions surrounding U.S. interference, fraud allegations and technical failures. Final results had led to conservative politician Nasru Asfura being declared victorious in December 2025 with a 40.26% of the vote, overcoming the center right Liberal Party (PLH). President Asfura is in line to serve a four-year term in office, pledging to fight ongoing corruption, crime and poverty as well as expressing how the use of private investment is essential in the revival of the Honduran economy. Political interference and political violence have both been re-affirmed at a medium-high rating following such discontent in the recent presidential election. In the weeks following the election, the ruling party, Libre, had repeatedly called upon supporters to protest against what they described as an ‘electoral coup’. Such protests had delayed a second manual count, which had been triggered by ballot-processing failures that compromised hundreds of thousands of ballots. Opposition discontent also intensified in response to U.S. President Trump’s support for the declared election winner, Asfura. President Trump had further threatened to cut all U.S. financial support to Honduras if Asfura was not able to take office, amid delays. In terms of foreign policy, Nasr Asfura’s election, alongside Washington’s support, means that rapprochement with the U.S. is more than likely as trade negotiations began shortly after the President’s election win. Legal & regulatory risk remains high.

In terms of the Honduran economy, the IMF have forecast GDP growth at 3.3% in 2026 and 3.7% rate in 2027. The economy is expected to be supported by favorable export prices and resilient remittances, both of which have continued to bolster international reserves. In addition, a recent IMF staff-level agreement on policies and reforms under the country’s fourth and fifth reviews will allow for the release of USD 245 mln in June 2026, pending approval by the IMF Board. Inflation remains aligned with the central bank’s (BCH) 4% ± 1% at an IMF projection of 4.4% in 2026 and 4.5% in 2027. The risk of doing business is therefore rated similarly at high. Sovereign non-payment risk is regarded to have remained medium, while exchange transfer risk has seen an upgrade to medium-low, reflecting the forecast decline in government debt to GDP to 43.8% in 2026 and 40.1% in 2027, as well as the continuation of the crawling peg with the USD. Although, 70% of such debt is denominated in foreign currency, potentially exposing capital owed to sudden exchange rate. fluctuations.

Mexico (MEX)

Mexico’s overall risk is medium-high. The critical issue for 2026 is the renegotiation of the USMCA agreement with the U.S.  With the Trump administration deploying threats ahead of the July 1 kick-off of negotiations.  With growth remaining sluggish due to existing tariffs and Iran-war-driven energy price uncertainty, a renewed trade war would delay the projected 2026 economic recovery. On balance, president Sheinbaum will likely concede in the USMCA trade battle to win the wider war of keeping most Mexican exports going to the U.S. In the end, we see a trade deal by late 2026/early 2027. This could be an addendum to the USMCA that sets different terms for Mexico than for Canada – Trump still has a good relationship with Sheinbaum, but Trump is verbally at war with Canada. Even so, Sheinbaum’s Morena party is a traditional supporter of Cuba (which the U.S. is trying to destabilize) and is opposed to Trump calls for present and former Mexican politicians to be prosecuted by the DOJ. This could mean intermittent tension with the U.S. Meanwhile, Sheinbaum’s average approval rating has modestly fallen from 70%, reflecting concerns over the weak economy and the high level of violence (amplified by the cartels). Political violence risk in Mexico therefore remains high. Legal and regulatory risk is also high, as the left-wing coalition led by MORENA controls both houses and could potentially lead to regulatory changes in an anti-market manner. Sovereign non-payment risk is medium, as the government debt level is projected to be 62.7% in 2026 according to the IMF, and the government is currently undergoing a fiscal consolidation process to stabilize the debt/GDP ratio. The inability of the government to provide stimulus remains at a medium rating, reflecting the fiscal consolidation. Exchange transfer risk is medium, as the country holds an adequate level of foreign currency reserves alongside a current account that is in broad balance.  

Panama (PAN)

Panama continues to uphold its overall country risk rating of medium. President José Raúl Mulino claimed victory in the May 2024, marginally beating his main opposition, within the center-right RM party. Public distrust toward political institutions remains widespread. President Mulino lacks a majority in the highly fragmented National Assembly and also had to contend with protests campaigning on mining and environmental issues. Political violence and political interference are both regarded to have a medium risk rating. In terms of the Central American state’s external relations, the Panama Canal continues to create significant opportunities for advancing trade negotiations, with increased use of its shipping lanes following the closure of the Strait of Hormuz. In April 2026, amid a temporary rise in demand and congestion of the waterway, some LPG vessels were recorded to have paid over USD 1 mln for an auctioned crossing slot, as LPG and container shipments remained among the strongest performers transiting the waterway. Panama is navigating a complex balance in its ties with the U.S. and China, as it currently prioritizes U.S. security concerns, while overturning the legal framework that had granted Hong Kong-based CK Hutchison’s Panama Ports Company the right to operate two terminals along the canal. CK Hutchinson had rejected the court ruling, claiming of damages of more than USD 2 bln and reportedly holding several Panama-flagged vessels in China in retaliation. Legal & regulatory risk has remained medium high. According to the recent IMF April 2026 outlook, forecasts have pointed towards a GDP growth of 3.8% in 2026 and 4.5% in 2027. Construction is expected to benefit from major infrastructure projects in the near future, which includes the 80 km LPG pipeline and two new port terminals. The Canal Authority stated that it expects to award contracts for the two new port terminals and the LPG pipeline by June 2027, with production foreseen to start around 2030, behind an estimated investment of USD 2.6 bln. Meanwhile, the Cobre Panama copper mine remains closed with government authorization allowing the removal of existing stockpile. The risk of doing business continues to be assessed as medium, while the government’s inability to provide stimulus has seen an upgrade to medium. Inflation, according to the IMF, is projected at 1.4% in 2026 and 2% in 2027, despite global pressures. Panama’s public finances, however, remain one of its key vulnerabilities. In an effort to restructure its forecast government debt to GDP of 57.7%, Panama initiated a large-scale tender offer in February 2026, through which it is repurchasing U.S. dollar-dominated bonds maturing between 2027 and 2063. Finally, sovereign non-payment risk and exchange transfer remain medium.

Paraguay (PRY)

Paraguay continues to uphold its overall country risk of medium. President Santiago Peña, a member of the Colorado Party and the youngest president of Paraguay’s democratic era, has currently served since his election victory in August 2023, as the April 2028 presidential election approaches. In recent developments, President Peña had appointed Oscar Lovera as the nation’s new economy and Finance Minister, replacing previous Minister Carlos Fernandez who resigned at the request of the president. The change in leadership was intended to consolidate the nation’s economic growth and political strength, but critics explain how institutional weakness has reduced the benefits for the population despite steady economic growth. In terms of international relations, Paraguay received its first 16 migrants deported from the U.S. under a migration cooperation agreement. Meanwhile, Paraguay continues to recognize Taiwan despite China’s efforts to expand its influence in the Southern American state through investment. Political interference remains medium-high, while legal & regulatory risk is assessed as high. In addition, as part of one of the world’s largest free trade zones, Paraguay benefits from an Interim Trade Agreement and a broader EU-Mercosur Partnership agreement.

 In the IMF’S April 2026 Outlook, GDP growth is forecast at 4.2% in 2026 and 3.5% in 2027 following strong performances in services, manufacturing and construction throughout 2025. Soybean and related agricultural exports are expected to increase throughout 2026, while access to new markets will enable Paraguay to expand its meat exports. Gasoline prices have seen a recent rise due to the Iran War, but despite this significant increase, prices remain generally lower than the global average. Amid global economic uncertainties, inflationary risks have remained low, supported by the IMF’s projection of a 3.3% inflation rate in 2026 and the Central Bank of Paraguay’s reduced policy rate of 5.50% (down from 6% in early 2026). The risk of doing business remains medium high, while banking sector vulnerability has worsened to medium. Government debt to GDP continues to support Paraguay’s moderate debt profile compared to the rest of South America. The IMF forecast 37.8% in 2026 and 37.6% in 2027. Sovereign non-payment risk remains medium, while exchange transfer has been upgraded to medium-low amid the recent appreciation of the Paraguayan guarani (PYG) and continued Central Bank intervention to avoid excessive volatility.

Trinidad and Tobago (TTO)

The Caribbean dual-island of Trinidad and Tobago has maintained its overall country risk rating of medium. President Christine Kangaloo, the second ever female President of Trinidad and Tobago and Commander-in-Chief of its armed forces, continues to serve her five-year term following her election victory in 2023. The alteration in leadership to the United National Congress in the 2025 snap parliamentary elections came with numerous promises, including its role in fighting the country’s organized crime and to balance U.S. demands with domestic economic needs. Political violence and political interference have both remained medium since its last evaluation. Trinidad and Tobago and the U.S. maintain close and robust ties focused on regional and energy security as well as trade. The country cooperated fully with President Trump’s administration, granting the U.S. military access to its airports towards the end of 2025, as tensions continued to rise between Venezuela and the U.S. Legal & regulatory risk remains medium-high.

Economically, the IMF have established that GDP growth is set to remain subdued in the near term before gradually recovering over the medium term. Forecasts estimate GDP growth to sit around 0.8% in 2026 and to recover to 3% in 2027, as many energy projects are expected to reach completion. Trinidad and Tobago have been among the nations in Latin America which have benefited from the hikes in energy prices due to its robust energy sector, however, households have still been hit by rising fuel and food prices. Inflation is projected to see a marginal increase to 1.8% in 2026 and 2.8% but is expected to stay in line with ongoing international trends. The risk of doing business is assessed at medium-high, while the Central Bank of Trinidad and Tobago has kept its policy rate at 3.5% since 2020 to support such economic recovery from the COVD Pandemic. In terms of the dual-Island’s debt profile, government debt to GDP is expected to continue its elevated trend as forecasts indicate levels of 84.1% in 2026 and 82.8% in 2027, while persistent FX shortages and policy slippages may have negatively affected market confidence. Exchange transfer has been assessed at a medium-low rating, while sovereign non-payment risk has seen negative movement to a medium-high rating.

Uruguay (URY)

Overall risk in Uruguay has been maintained at a rating of medium-low. President Yamandú Orsi, a member of the left-wing Frente Amplio coalition, had taken office in March 2025 succeeding Luis Lacalle Pou in his November 2024 run-off election victory. China remained the main destination for Uruguayan exports throughout 2025, while the Latin American country continued to balance traditional ties with the West against its significant reliance on China. Legal & regulatory risk as well as political interference both remain medium-low. Uruguayans have expressed their concern that rising organized crime, particularly drug trafficking along the country’s borders, poses a significant threat to national security. Although political violence is unchanged at medium-low, violence is heavily concentrated in specific suburbs of Uruguay’s capital, Montevideo. According to the IMF’s April 2026 outlook, Uruguay’s GDP growth is expected to show little change compared to 2025, with a forecast of 1.8% in 2026, followed by a moderate acceleration to 2.6% in 2027. Strong private consumption and record beef exports have partially offset the impact of the dry weather conditions, which have weakened agricultural harvest – typically one of Uruguay’s main economic drivers. Separately, a strong peso has also weighed on export competitiveness. The risk of doing business remains medium-high risk, as inflation is expected to remain within the Central Bank of Uruguay’s target range following its decision to hold its monetary policy rate at 5.75% in April 2026. Lastly, sovereign non-payment risk and exchange transfer both maintain medium-low ratings following the government’s decision to shift its government debt away from the dollar to the local peso, in order to diversify the country’s risks and to prepare for any potential economic shocks. Government debt to GDP is expected to remain reasonably high at 66.8% in 2026 and 67.7% in 2027.

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