Latin American and Caribbean countries must adopt a pro-growth fiscal strategy to avoid falling into a debt trap

March 30, 2021  

By Emilio Pineda, Oscar Valencia, Alejandro Rasteletti and Matilde Angarita. 

With the outbreak of the pandemic, fiscal balances in Latin America and the Caribbean (LAC) deteriorated and public debt increased significantly. When combined with the expected slowness of economic recovery, this will put significant pressure on the sustainability of public finances for countries in the region. Given this scenario, these countries urgently need to develop and implement a fiscal strategy to reactivate their economies and foster inclusive growth, while at the same time ensuring fiscal sustainability to avoid falling into a debt trap. 

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