As anticipated in our last global economic outlook, elections around the world have driven notable policy changes that altered the trajectories of inflation, borrowing costs, currency values, and trade and capital flows in 2025. One significant development was that the United States raised significant barriers to trade, disrupting supply chains and creating financial market volatility. Since then, it has struck trade deals with numerous countries, reinstating some predictability in those trading relationships, albeit at higher costs. Restrictive US trade policy has also pushed other countries closer together, with numerous trade deals being linked among non-US countries.

In 2026, we expect to see the effects of these global policy shifts more clearly. Governments are adapting to a new geopolitical reality and adjusting their fiscal and structural policy plans accordingly. This will likely become more apparent in the new year. In addition, several countries are competing to remain at the frontier of technological innovation, particularly in artificial intelligence, while others are trying not to fall further behind. Significant investments to develop this innovation ecosystem are likely to continue in 2026. However, there is a risk that related spending has occurred too quickly and that a downward adjustment could be on the horizon.

"Geopolitical tensions and trade realignments are redefining global economic dynamics heading into 2026"

In the following sections, economists from Deloitte’s firms offer their views on their respective countries’ outlooks for the coming year. We hope that readers will find these outlooks interesting, insightful, and helpful. Your feedback is most welcome, and our economists are available for more in-depth discussions on these matters.

The Americas

Argentina – Daniel Zaga and Federico Di Yenno

Argentina will enter 2026 after two years of profound macroeconomic adjustment that reshaped its policy framework and restored a degree of stability to an economy long challenged by chronic imbalances. The program launched in December 2023 combined fiscal consolidation, the elimination of central bank monetary financing, and a managed exchange-rate regime that began with a sharp devaluation and continued with a gradual crawl to anchor expectations. These measures, reinforced by structural reforms and deregulation, delivered Argentina’s first primary fiscal surplus in over a decade—1.8% of gross domestic product in 2024—and set the foundation for sustained disinflation.

Inflation, which peaked near 300% in 2024, is projected to fall to 29.4% in 2025 and 13.7% in 2026, supported by tight monetary policy and credible nominal anchors. Monthly inflation stabilized around 2% by late 2025, signaling progress toward price normalization and restoring confidence in the domestic currency.

Economic prospects have improved markedly. After contractions in 2023 and 2024, GDP growth is expected to rebound by 4% in 2025 and moderate to 3.5% in 2026 as the economy transitions from stabilization to expansion. The recovery is led by consumption and construction—sectors revitalized by wage recovery and private investment—while the energy and mining sectors emerge as strategic growth drivers.

Oil and gas production is accelerating thanks to the Vaca Muerta shale, supported by new pipelines and liquefied natural gas export projects, positioning Argentina as a net energy exporter and generating an energy trade surplus after years of deficits. Mining, particularly lithium and copper, is also set to benefit from the Large Investment Incentive Regime (or “RIGI”), which guarantees tax and foreign exchange stability for 30 years on projects exceeding US$200 million. Announced investments already surpass US$30 billion across energy, mining, and infrastructure, signaling strong investor confidence in Argentina’s resource potential and regulatory framework. This is expected to boost investment further, as these projects advance.

"Argentina’s stabilization program is laying the groundwork for renewed investment and long-term economic growth"

External accounts remain favorable, with a trade surplus projected at US$9 billion in 2025 and US$13 billion in 2026, despite imports recovering alongside investment-led growth. Net international reserves of the central bank, which stood at negative US$11 billion in late 2023, are expected to turn positive in 2026, aided by International Monetary Fund disbursements and capital inflows under the RIGI. This improvement in reserves, combined with a credible fiscal anchor, has strengthened Argentina’s external position and reduced vulnerability to external shocks.

Financial conditions have also improved significantly. Country risk ratings fell from 2,500 basis points in late 2023 to around 600 by end-2025, reflecting fiscal consolidation, structural reforms, and progress in reserve accumulation. Argentina is expected to regain market access in 2026, contingent on sustained fiscal surpluses and continued credibility of the macroeconomic framework. This normalization of financial conditions will be critical for refinancing obligations and supporting long-term investment.

Structural reforms—including tax restructuring, privatization frameworks, labor market modernization, and full capital account liberalization expected to be achieved in 2026—aim to consolidate competitiveness and attract long-term investment. These reforms, together with the RIGI, provide a stable and predictable environment for large-scale projects in energy, mining, and infrastructure, reinforcing Argentina’s potential as a regional hub for resource-based industries and renewable energy development.

The outlook for 2026 is therefore considerably more positive than in previous years. Argentina is projected to maintain fiscal discipline, deepen structural reforms, and leverage its resource endowment to secure growth while reducing inflation and restoring market confidence. The challenge ahead lies in sustaining credibility, accelerating regulatory normalization, and attracting foreign capital to consolidate the transition from stabilization to sustainable development. If these conditions are met, Argentina could enter a new phase of macroeconomic stability and investment-driven growth, reversing decades of volatility and positioning itself as a competitive player in global energy and mining markets.

Canada – Dawn Desjardins

The Canadian economy is expected to continue to face challenges in 2026, although supportive monetary and fiscal policy will alleviate some of the stress; growth is projected to firm modestly following a subdued performance in 2025. The evolving geopolitical landscape will likely influence how Canada’s economy transitions in the year ahead. The government has introduced policy changes aimed at catalyzing business investment. Financial conditions are assumed to remain supportive, with the Bank of Canada expected to hold the policy rate steady throughout the year.

The key will be a recovery in business confidence, which dropped in 2025 amid growing concerns about Canada’s trading relationship with its largest partner, the United States. Tariff exemptions afforded by the United States–Mexico–Canada (USMCA) trade agreement are expected to remain in place in 2026, although the agreement review slated for July 2026 will likely keep businesses cautious. Consumers will feel relief from lower interest rates, although somewhat softer labor market conditions and slower immigration growth will keep spending in check.

"Canada’s economic outlook depends heavily on investment recovery and the stability of its trade relationship with the United States."

Overall, we expect the economy to grow at a slightly slower pace than 2025’s projected 1.7%. Canada’s governments are putting on a full-court press to spur investment by reducing regulatory hurdles and boosting infrastructure spending. The federal government’s budget includes measures that will help the supply side of the economy by greenlighting large projects in the resource sector and infrastructure, boosting defense spending while supporting sectors impacted by US tariffs, and encouraging trade diversification. These measures, combined with provincial government initiatives, are expected to make a solid contribution to GDP growth in 2026 and beyond.

Labor market conditions softened in early 2025, especially in sectors most impacted by US tariffs, including steel and aluminum, lumber, and finished autos. The unemployment rate trended higher and was over 1.7 percentage points above the post-pandemic low in November 2025. Business outlook surveys indicated that employers aren’t looking to increase their workforce over the year ahead but, importantly, are also not looking to cut employees. Therefore, the labor market will likely remain soft; and with labor force growth reversing after strong immigration-led gains in 2023 and 2024, the unemployment rate is projected to remain around current levels.

Inflation trended higher in 2025 from the lows of mid-2024, with the headline rate in line with the Bank of Canada’s 2% target and underlying measures trading closer to the top of the 1%-to-3% target band. Inflation expectations, however, remain contained, and given the economy expanded below its potential pace for three successive years, price pressures are expected to remain limited. Risks of price escalation from disrupted supply chains and increased costs of Canadian imports will likely persist in 2026, although the passing down of these costs to consumers is not expected, given weak underlying demand. Against this backdrop, we expect the Bank of Canada to move to the sidelines, with the policy rate expected to remain at a slightly accommodative 2.25%. This lower-rate environment will help ease the pressure on households renewing mortgages in 2026, many of which were taken when interest rates were at all-time lows. This will also support a recovery in the housing market after two years of weak performance.

By far, the area of the economy facing the greatest uncertainty is the export sector, where USMCA-associated carve-outs that are currently in place remain at risk. Our assumption is that the US administration will allow these exemptions to remain in place and that the review of the agreement slated for July 2026 will result in negotiations about trade irritants but will not lead to any exits from the deal. Notably, Article 34.6 of the agreement allows any country to withdraw with six months’ notice, but there has been no indication that any of the parties is considering this option at the time of writing. Thus, we expect Canadian exporters to continue to benefit, and demand for Canadian goods to recover in 2026. The federal government aims to double the percentage of Canadian exports to non-US countries by spending on infrastructure to facilitate and reinforce such supply chains.

Colombia – Daniel Zaga and Nicolás Barone

The Colombian economy is emerging from an uneven recovery, maintaining moderate growth despite persistent structural challenges and global uncertainty. After the pandemic, activity has stabilized, supported by resilient household consumption and selective sectoral dynamism. Real GDP grew 2.4% year on yearin the second quarter of 2025, driven by entertainment, agriculture, and retail, while construction and mining continued to contract, underscoring the fragility of investment-led growth.

"Colombia’s growth prospects remain tied to domestic demand and the gradual diversification of its export sectors"

Domestic demand has been a key anchor for Colombia. Consumer spending grew 3%,⁹ reflecting household adaptability even under tight credit conditions; investment, though positive at 1.7%, remains subdued, with machinery and equipment showing robust gains while housing investment plunged over 10%,¹⁰ signaling ongoing weakness in real estate. This divergence highlights the economy’s reliance on capital goods for productivity improvements amid structural bottlenecks in construction. Inflation remains a primary challenge. After early signs of moderation, price pressures resurfaced, pushing headline inflation to 5.1% in August,¹¹ well above the central bank’s 3% target. Food prices have been the main driver of inflation, while core inflation eased slightly, suggesting some relief from supply-side constraints. The Banco de la República has held its policy rate at 9.25%, prioritizing price stability over growth, and is unlikely to ease before year-end.

Labor market conditions have improved gradually. Unemployment fell to 8.8%, and informality edged down, though regulatory changes increasing labor costs could slow formal job creation. Meanwhile, external accounts show cautious optimism: Foreign currency inflows reached US$54.1 billion, supported by services and tourism, while goods exports stagnated and fuel shipments declined sharply. This shift signals a slow but meaningful diversification toward agriculture and value-added sectors such as coffee and precious metals. The peso appreciated to 4,047 per US dollar, aided by lower risk premiums and investor confidence, though oil-price softness capped further gains. Fiscal dynamics remain a weak link. The deficit is likely to exceed 7% of GDP in 2025, prompting activation of the fiscal rule’s escape clause. A proposed tax reform seeks to raise 26.3 trillion pesos (1.5% of GDP) through higher wealth and income taxes, surcharges on financial institutions, and the elimination of fuel-related value-added tax benefits. While critical for revenue mobilization, its approval faces political hurdles and could weigh on activity via higher fuel costs.

Looking ahead, 2026 offers a cautiously optimistic outlook. Growth is projected to accelerate slightly to 2.7%, supported by stronger performance in the retail, financial, and insurance services sectors, which are expected to expand 6.7%, overtaking entertainment as the leading sector. Retail and professional services will maintain steady gains, while information and communication could see a notable rebound. Inflation is forecast to ease to 3.7%, paving the way for gradual monetary normalization and improved credit conditions. Exchange-rate stability is anticipated with the peso hovering near the 4,000 per dollar mark, while external accounts should benefit from continued momentum in services and tourism.

But risks persist. Fiscal sustainability, global commodity volatility, and external shocks remain key concerns for Colombia, although improving business confidence and sectoral diversification are creating a foundation for sustained, albeit modest, growth.

Mexico – Daniel Zaga and Erika Peralta

The Mexican economy will most likely close 2025 with an economic growth rate of 0.4%, representing a notable decline compared with the 1.2% recorded in 2024. Factors such as tariff tensions and an uncertain business climate affected foreign direct investment (FDI), domestic consumer spending, and consequently, job creation. Likewise, the contraction in government spending and investor caution led to a 3.3% decline in industrial activity in September 2025 versus a year ago, driven by a 7.2% drop in construction and a 2.3% decline in manufacturing during the same period. In contrast, productive sectors such as agriculture, retail trade, business support, and professional, scientific, technical, health, and real estate services boosted GDP dynamism through the third quarter of the year.

"Nearshoring and renewed investment could become key drivers of Mexico’s economic recovery in 2026"

Private consumer spending was also constrained by the reduction in remittance inflows, which stood at US$45.7 billion through September 2025, representing a 5.5% decrease compared with September 2024. Additionally, the lower FDI inflows discouraged job creation, particularly in the manufacturing sector. From January to October, cumulative formal job creation reached 550,800 new positions, or 7.4% less than the amount recorded during the same period in 2024. Meanwhile, job losses in manufacturing totaled 249,000 through September of this year.

Inflation remained within Banco de México’s tolerance band of 2% to 4% between January and October. By year-end, inflation is expected to reach 3.8%, mainly driven by goods and services prices that make up core inflation. Likewise, the exchange rate is expected to close December at an average level of 18.80 pesos per dollar, which implies a 1% appreciation compared with January 2025. It is worth noting that throughout the year, the peso strengthened against the US dollar due to factors such as Mexico’s competitive interest rate, the relative stability of public debt, and the generalized weakness of the dollar.

Looking ahead to 2026, the economy is expected to see a recovery, with GDP growth reaching 1.6%, as the uncertainty generated by tariff tensions dissipates, particularly given that the USMCA’s six-year review is due to take place on July 1, 2026. In this context, investment postponed during 2025 is expected to bolster nearshoring and stimulate the manufacturing and construction sectors. Additionally, the interest rate–cutting cycle implemented by the central bank is expected to encourage investment and job creation in 2026. By December 2025, the benchmark rate is expected to close at 7%, while further cuts in 2026 could bring it to around 6.5%.

Inflation is expected to end 2026 at around 3.8%, driven by noncore inflation, which has persisted through 2025. As for the exchange rate, the dollar will likely attempt to regain strength in the first half of 2026. However, the recovery of investment—particularly through nearshoring in the medium term—along with an interest rate that remains competitive among emerging economies, would allow the exchange rate to end next year at approximately 18.70 pesos per dollar. Mexico nevertheless faces several risks, including an increase in the fiscal deficit above 4.1% of GDP, lower remittance inflows, uncertainty regarding the performance of nearshoring, and the possibility of a profound renegotiation of the USMCA—factors that could weigh on GDP growth.

"Artificial intelligence is rapidly becoming a central driver of investment, productivity, and market expectations in the United States economy."

United States – Michael Wolf

“Resilient” continues to be the best way to describe the US economy. Real GDP was 2.1% higher in the second quarter compared with a year earlier.Consumer spending and business investment have been the primary growth engines despite significant headwinds. We now expect real GDP to grow by a healthy 2% in 2025. AI is likely fueling much of this growth. For example, business investment has been concentrated in information processing equipment and software. In addition, a dramatic rise in AI-related stock prices is likely bolstering consumer spending, especially for those at the higher end of the income and wealth distribution.

In 2026, we expect business investment to remain strong as companies continue to compete to be at the frontier of AI-related technological advancement. We also expect a boost to consumer spending at the start of 2026, thanks to the reopening of the federal government. Government workers who went without pay during the record 43-day shutdown have been reimbursed for their lost wages. Typically, this results in a boost to spending over the next couple of quarters. However, the boost in 2026 is merely making up for weaker spending during the shutdown.

Apart from the modest boost at the beginning of the year, consumer spending is expected to slow in 2026. Stock price valuations are already quite lofty, which will restrain gains next year. This, in turn, will likely restrain consumer spending for those at the top rungs of income distribution. At the same time, aggregate wage growth will slow further as a sharp drop in net migration holds down employment growth. In addition, businesses are increasingly passing their tariff costs on to consumers, which will reduce their purchasing power. Although the Fed has cut interest rates twice this year, we expect additional rate cuts to occur gradually. In addition, we expect longer-term interest rates to come down even more slowly, resulting in a steepening of the yield curve. This will keep downward pressure on business investment unrelated to the AI boom. It will also restrain consumer spending on durable goods.

In our baseline scenario, real GDP growth is expected to stand at 1.9% in 2026. Much of that growth is expected to be concentrated in the first half of the year, with domestic demand slowing in the second half as delayed compensation for federal workers runs out, while AI-related consumer spending and business investment growth shift lower. However, risks are tilted to the downside, and other scenarios could easily materialize.

"Artificial intelligence is emerging as one of the most powerful forces shaping economic growth in the coming decade."

With so much consumer spending and business investment reliant on AI-related stock prices and anticipated returns on AI, respectively, the economy remains vulnerable to any faltering of those two drivers. Just maintaining current spending levels for consumers and businesses would create a significant drag on GDP growth. A drop in AI-related spending next year could be enough to push the economy into a recession. Other parts of the economy are more strained and will therefore not be able to make up for the loss of AI-related economic activity.

The silver lining is that the Fed still has sufficient room to cut rates and support the economy if such a scenario plays out. This is in stark contrast to the economic environment that persisted for the decade leading up to the pandemic. During those years, interest rates were already up against the zero lower bound. Today, the Fed can cut interest rates by another 375 basis points if necessary. That does not mean the process will be painless. However, it suggests that the economy could rebound relatively quickly after an adjustment period.