ECLAC: Rising oil prices threaten economies in Central America and the Dominican Republic

The Economic Commission for Latin America and the Caribbean (ECLAC) warned that the war in the Middle East is driving higher fuel prices that could increase inflation and weaken fiscal and trade balances across the region, although Latin America remains in a relatively stronger position than many other parts of the world.

According to ECLAC, rising oil and fertilizer prices are reducing household purchasing power by increasing transportation and distribution costs, while creating uneven economic effects among countries. Net hydrocarbon exporters are expected to benefit from higher export revenues, whereas most energy-importing nations—including Central America, Haiti, and the Dominican Republic—are likely to face worsening trade balances.

The organization estimates that if oil prices remain 25% higher than in 2025, the trade balance of Central America, Haiti, and the Dominican Republic could deteriorate by 0.9% of GDP in 2026. Governments that subsidize fuel prices to protect consumers may also see greater fiscal pressure.

ECLAC added that average energy prices in 2026 are expected to remain at least 25% above 2025 levels, regardless of developments in peace negotiations, while maintaining its forecast of 2.2% regional economic growth and 3% inflation for the year.