Fears Mount of a Fresh Latin American Debt Crisis

Latin America is at the centre of the coronavirus pandemic, suffering some of the worst infection rates and highest death tolls in the world, the Financial Times reported. Now economists warn that the region faces more bad news: its sickly economies risk falling into a new debt crisis even worse than the last big bust of the 1980s. The continent was struggling with multiple “pre-existing conditions” before the virus took hold: anaemic growth, weak health systems, low tax revenues, high levels of borrowing and an over-reliance on commodity exports. Now some of the longest lockdowns in the world, together with the accompanying costly rescue programmes, have wreaked havoc on public finances. Chile, Brazil and Mexico were among the five emerging markets globally with the biggest increase in debt to GDP this year, according to the Washington-based Institute for International Finance. Read more