external debt

Private debt in Latin America

Vie, 05/21/2021 - 10:26 -- anegrete

COVID induced a drop in production that left the world exposed to a financial crisis derived from the lack of income of companies when they have an accumulation of private debt and loss of profits.

Regarding new signs of financial fragility or instability in the region, derived from private sector problems, evidence shows that private external debt is more substantial than sovereign external debt in Latin America in the third decade of the 21st century.

High levels of private external debt could lead to a costly renegotiation process to reduce or restructure it. The question is whether this would be done by private agents or by the State as guarantor of the economic activities of the country.

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