The public debt of Latin America and the Caribbean has grown to such a high level that the interest payments it generates represent 70 percent of spending on education, according to the latest available data from the Economic Commission for Latin America and the Caribbean (ECLAC). In other sectors, resources allocated to cover the interest rates on the debt mean 86 percent of health spending and 57 percent of the amount allocated to social protection.
«Now, given the higher levels of indebtedness and higher financing costs that countries in the region face, a situation has emerged that has been increasing in recent years: the payment of interest has reduced the availability of public resources for priority spending, such as education, health, social protection, or public investment. We have called this phenomenon 'development constraints,'» commented Noel Pérez, the official in charge of the economic development division of ECLAC.
The public debt of the governments of Latin America is high, and as of September 2025, it represented 51.8 percent of the Gross Domestic Product (GDP), a slight variation from the 51.5 percent recorded in 2024.
«If we compare it with the proportion from 15 years ago, we are talking about debt levels 20 percentage points of GDP higher than they were at that time, which has implications, as it reduces fiscal space,» added Pérez.
In 2008, the public debt of central governments was equivalent to 29.4 percent of the region's GDP; by 2025, it had increased to 51.8 percent of GDP, representing a growth of 22.4 percentage points.
The highest level was 56.2 percent of the product, in 2020, the year the COVID-19 pandemic was declared.
«As interest rates have risen over the last 12 years, public investment has decreased in a nearly similar proportion and has been the variable of adjustment to accommodate these higher interest payments,» mentioned the ECLAC analyst.
The body projects for Latin America a total expenditure of 21.8 percent of GDP with revenues of 18.5 percent of GDP, which will lead to a global deficit that will increase or slightly deteriorate to go from 3.1 percent last year to 3.3 percent of GDP in 2025.
«But what remains stable is the primary deficit, which remains at 0.3 percent of GDP, which shows that the countries in the region continue to make fiscal consolidation efforts,» he stated.
Regarding inflation in the region, he detailed that 11 countries have set targets and this year they resumed the cycle of rate cuts.
«For 2026, the expectation is that the rate-cutting cycle will continue, but in a more moderate or slower manner.»
He highlighted that the nations showed an acceleration in the growth of the monetary base and international reserves increased by about 10 percent during this year and total 924,424 million dollars.
By Jessica Becerra La Jornada Mexico City.
