Moody's Investors Service warned Wednesday that Latin America's most significant countries could see governments' limited ability to stimulate economic growth because debt burdens are likely to remain high.
The rating agency said in a report that the growth of sovereign debts in the region coincides with rapidly rising interest rates worldwide, making refinancing them increasingly less affordable.
"The interest cost of debt, measured as the ratio of general government interest payments to revenues, will continue to comprise a larger proportion of government budgets than before the pandemic," Moody's said.
"Moreover, as Latin American sovereigns divert fiscal resources . . .