Fiscal risks in Latin America have largely been out of the spotlight over the past year, but we think that public debt concerns will build over the coming years. Sovereign defaults seem more likely than not in a handful of countries (Argentina, Ecuador and Bolivia) that still show some of the vulnerabilities that were widespread in the region decades ago. The good news is that the nature of sovereign debt problems elsewhere in the region has fundamentally changed and default risks are much lower now. But even so, public debt dynamics across much of Latin America are likely to worsen from 2024.
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