One of the world’s most closely monitored climate events is expected to have significant consequences across Latin America over the coming months. While its effects will vary by country, the 2026–2027 El Niño is likely to impact business activity, supply chains and credit risk throughout the region.

Countries along the Pacific coast of South America are expected to experience heavier rainfall and flooding, while Mexico, Central America and parts of northern South America could face prolonged droughts and heatwaves. These changing conditions may disrupt economic activity and affect the financial stability of companies operating in vulnerable sectors.

Among the industries most exposed are agriculture, agribusiness, fisheries, food processing, transportation and logistics, as well as businesses with high water dependency. At the same time, sectors such as infrastructure, reconstruction, water management and renewable energy may benefit from new investment opportunities.

For organizations that manage commercial risk, this is a timely opportunity to review customer portfolios, assess credit exposure and strengthen the monitoring of companies operating in regions or industries that could be affected by these conditions. Anticipating changes before they impact business relationships can make a significant difference in risk management.