Latin American Countries With The Greatest Central Government Debt

Argentina is struggling with an economic crisis that has seen the peso lose two-thirds of its value since 2018. 
  • The gross public debt of Latin America is about 41.9% of GDP
  • Argentina has defaulted eight times since independence in 1816. In early 2020, it was about to default the ninth time
  • As of December 2019, the public debt of Brazil stood at $1.34 trillion

Global debt rose from $74 trillion in 1997 to $257 trillion in 2018, representing 317% of global GDP.  Mounting debt is a trend that affects the developed and developing countries as well as all sectors of the economy. States with the highest public debt-to-GDP ratio are Japan (237.69%), Sudan (207%), Greece (176.6 4%), Eritrea (165.11%), and Lebanon (155.13%).  Latin America has grappled with public debt since the Latin American Debt Crisis Of the early 1980s. In 2019, central government gross public debt in Latin America averaged 41.9% of the GDP. The level of indebtedness varies from one country to another with 11 countries reporting improvements compared to 2018. Argentina has the highest percentage of public debt in the region at about 86% of the GDP. Brazil is second with 77.2%, followed by Costa Rica (52.9%), Columbia (50.7%), Uruguay (50.3), and Honduras (48.7%). Those with the lowest level of gross public debt are Paraguay (18.4%) and Peru (21.3%). In 2015, Venezuela had a debt-to-GDP ratio of about 31%, but it is currently estimated at 80% due to the political crisis and hyperinflation in the country. 

Effects Of External Debt

Governments spend massive amounts paying off external debts that can hurt fragile economies, especially developing countries. In extreme circumstances, highly indebted countries may try to sell debts to the private sector or borrow funds from the World Bank and IMF. Venezuela tried printing money to pay off public debt but instead triggered hyperinflation of more than a million percent. When the government spends much of what it collects to pay off debt, it is unable to finance development and the public service. 

Latin American Countries With The Greatest Central Government Debt


Argentina has the highest debt-to-GDP ratio in Latin America at about 86% or $285 billion. The country is struggling with an economic crisis that has seen the peso lose two-thirds of its value since 2018. Inflation is about 30%, and the economy has shrunk by 4% since 2015.  Between 2015 and 2019, the external debt of Argentina rose by 60%. Argentina has defaulted eight times since independence in 1816, and in early 2020 it was about to default on another debt. 


The public debt of Brazil is about 77.2% of its GDP, which amounts to $1.34 trillion. The depth is expected to reach 81.8% by 2022 before it begins to decline. Brazil's debt reached a record 79.8% in August due to increased interest payments and a weaker exchange rate, before stabilizing at 77.2%. Brazil borrows from the international community to fund fiscal deficit which stood at about $112 billion in 2019. Unlike Argentina, Brazil is paying off its debts and is less likely to default. 

Costa Rica

Costa Rican public debt is about 52.9% of its GDP, which is equivalent to about $39 billion. Much of the debt is incurred to finance the fiscal deficit, which rose to 6.96% of the GDP in 2019. In February 2020, the Finance Ministry announced plans to use profits from parastatals to pay outstanding interest.  The government also announced plans to curb tax evasion, reduce public spending, and replace expensive debt. In addition to foreign debt, Costa Rica is also grappling with inflation and rising unemployment. 


The public debt-to-GDP ratio of Columbia is about 50.7%, which is about $152 billion.  This is a slight decline from 52.16% in 2018 and a slight increase from 49.45% in 2017. Columbia is currently facing significant budget deficits which is a concern because other governments are recovering from the 2008 global financial crisis and paying off debts. Columbia has experienced annual budget deficits for the past decade, which means that it is incurring more debt. 


The public debt of Uruguay is about 50.3% of its GDP, which is about $28 billion. Just like other countries in Latin America, Uruguay borrows to finance its fiscal deficit. At the close of 2019, the fiscal deficit was about 4.8% of GDP, the highest in 30 years.  The economy has grown slowly in the last decade, but public spending has risen by over 50% in real terms. Public service expenditure increased by 16% while public interest rose by 10%, mounting more pressure on the government.

Latin American Countries With The Greatest Central Government Debt

RankLatin American countryDebt as share of GDP
3Costa Rica52.9%

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