Public finances in Latin America in the 1980s

The crisis in the public finances of most Latin American and Caribbean countries was one of the main features of the economic plight of the region in the 1980s. It played a central role in the serious budgetary constraints on the public sector, which stemmed from high deficits -exacerbated by recessions and the debt burden- and the sharp drop in external financing. This situation led to the creation of various combinations of inflationary financing, suspension of debt servicing payments and fiscal adjustments in government economic policies during the decade. Structurally speaking, however, the financial crisis of the public sector revealed the weakness of financial structures in the face of external shocks and domestic pressures, and their growing inability to finance public policies designed to promote stability, growth and equity.The crisis in the public finances of most Latin American and Caribbean countries was one of the main features of the econom ic plight of the region in the 1980s. It played a central role in the serious budgetary constraints on the public sector, which stemmed from high deficits -exacerbated by recessions and the debt burden- and the sharp drop in external financing. This situation led to the creation of various combinations of inflationary financing, suspension of debt servicing payments and fiscal adjustments in government economic policies during the decade. Structurally speaking, however, the financial crisis of the public sector revealed the weakness of financial structures in the face of external shocks and domestic pressures, and their growing inability to finance public policies designed to promote stability, growth and equity.

Sustainable Development Goals:

Decent Work and Economic Growth

Industry, Innovation and Infrastructure

Peace, Justice and Strong Institutions