Which Latin American Countries Have the Biggest Public Debt Burden?

Levels of indebtedness increased in the majority of the world’s emerging markets in the decade prior to the Covid-19 pandemic

Los países de Centroamérica y Panamá, sin República Dominicana, acumulan casi los US$170.000 millones en deuda pública, según datos de la SECMCA.
May 30, 2023 | 04:50 PM

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Bloomberg Línea — At end-2022, Latin American countries recorded, on average, a gross public debt of 51.5% of GDP, according to a survey by the Economic Commission for Latin America (ECLAC).

The survey takes into account Brazil plus all Spanish-speaking states in the region, with the exception of Bolivia, Cuba and Venezuela.

The figure represents a decrease of 1.6 percentage points compared to the end of 2021.

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In terms of sub-regions, South America and Central America presented levels of public indebtedness of 53.9% and 49.1% of GDP, respectively.


According to ECLAC, these levels of public debt in relation to GDP reflect the need for significant financing that the countries of the region have faced to cope with the high costs derived from the pandemic.

“Although improvements have been observed in public debt in 2021 and 2022, levels remain historically high compared to other regions, and continue to exceed the threshold of 50% of GDP, similar to the figures observed 20 years ago in the region,” the ECLAC report states.

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Public debt by country

These are the percentages of GDP that gross public debt represent for the following countries at end-2022, according to ECLAC, arranged in order of the heaviest debt.

  • Argentina: 85% of GDP
  • Brazil: 72.9%
  • Costa Rica: 63.9%
  • Panamá 62.1%
  • Ecuador: 60.4%
  • Colombia: 58.5%
  • El Salvador: 54%
  • Uruguay: 53.1%
  • Honduras: 52.3%
  • Dominican Republic: 45.5%
  • Nicaragua: 45.2%
  • Mexico: 40.7%
  • Chile: 38%
  • Paraguay: 32.6%
  • Peru: 31%
  • Guatemala: 29.3%

It is important to note that large amounts of debt do not always imply a risk of default, but rather far from it, since if countries have good access to the market they should have no problem in rolling over their maturities with new placements.

On the other hand, many countries have a large percentage of intra-state debt, i.e., treasury debt with public agencies.

According to ECLAC, public debt levels had increased progressively in most emerging and developing regions already in the decade prior to the pandemic.

“Given weak macroeconomic fundamentals at a global level and adverse price shocks to non-renewable natural resources, especially after the oil price collapse in 2014 and 2015, such increases had serious repercussions in those economies, and in some cases generated high and persistent fiscal deficits,” ECLAC states in the report.

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In 2019, the general government gross public debt of these regions was, on average, 50.1% of GDP, a level much higher than the average for the 2010-2014 period.

At the level of regions, in emerging and developing economies in Asia, public debt increased by an average of 16.2 percentage points of GDP over the same period. In Latin America and the Caribbean, the figure was 18.8 percentage points of GDP; in the Middle East and Central Asia, debt increased by 19.8 percentage points of GDP, and in the Sub-Saharan Africa region, the increase was 21.5 percentage points of GDP.

The shock to public finances from the coronavirus crisis exacerbated this trend, resulting in a sharp increase in public debt.

Although the ratio of public debt to GDP tended to decline in 2021 and 2022, mainly due to the rapid recovery of nominal output, debt levels remain high and are well above those recorded in previous economic and financial crises such as the one that occurred in the late 1990s and early 2000s in emerging and developing regions.

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