Who leads the public debt ranking in South America? These are the countries with the highest debts
Public debt is what a State owes to third parties, whether to internal or external lenders. In South America, the most indebted country is Argentina, which owes the equivalent of 85% of the total production of its economy. In parallel, the country that owes the least is Peru. Here is an overview of public debt in South America.
Countries with the highest public debt in South America
Argentina
Argentina and Brazil are the two countries with the highest public debt in South America relative to the size of the economy. Argentina’s public debt represented 85% of its GDP in 2022, according to Statista and Datosmacro. That year the debt amounted to USD $534 billion.
What leaves Argentina at the top of indebtedness in South America is the debt-to-production ratio. According to ECLAC, 70% of Argentina’s public debt was in foreign currency in 2021 and 44% in the hands of non-residents. Of Argentina’s external public debt, 72% is in bonds and another 24% is owed to multilateral organizations.
Brazil
Brazil also leads the list of indebted countries in South America. According to Statista, the public debt of Brazil’s central state was 72.9% of its GDP in 2022. According to Datosmacro, which also takes information from local governments, public debt for the same year amounted to 85.3% of GDP.
In 2022 public debt exceeded USD $1.6 trillion, according to Datosmacro. In contrast to Argentina, a major advantage of Brazil is that it has only 7% of its total public debt in foreign currency and only 14% is held by non-residents, according to a 2023 ECLAC study.
Bolivia
Bolivia is the last of the highest debt countries in South America with significant public debt relative to its output. According to Statista, Bolivia’s central government public debt represented 68% of its GDP in 2022. Meanwhile, Datosmacro, placed public debt at 80% of Bolivian GDP for the same year.
The balance of Bolivian public debt is USD $35 billion, according to Datosmacro. Of the total figure, USD $17 billion is external debt. According to ECLAC, 70% of the latter was contracted with multilateral organizations.
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South American countries with the lowest public debt
Peru
According to Datosmacro, Peru’s public debt is equivalent to 34% of GDP, while Statista puts it at 31% of GDP. The total debt amounts to USD $84 billion. According to ECLAC, 51% is denominated in foreign currency and 52% of the total is held by non-residents.
Chile
Both Datosmacro and Statista agree that Chile’s public debt represents 38% of GDP. The total amount of debt is USD $114 billion. 35% was contracted in foreign currency and 46% of the total is held by non-residents, according to ECLAC’s 2023 report.
Paraguay
Datosmacro reports that Paraguay’s public debt is equivalent to 40% of GDP, while Statista estimates that debt amounts to 32.6% of GDP. Paraguay’s total debt is USD $17 billion. Ninety percent of this figure is denominated in foreign currency and 89% of the total is held by non-residents, according to ECLAC.
Colombia
Colombia’s public debt represents between 58.5%, according to Statista, and 60% of GDP, according to Datosmacro. According to the latter portal, Colombia is the fifth most indebted country in South America, after Brazil, Argentina, Bolivia and Suriname. In Statista, Colombia is in sixth place and is surpassed by Ecuador, in addition to those already mentioned.
Colombia’s public debt was USD $207 billion, according to Datosmacro. 53% of Colombia’s public debt is in the hands of non-residents and 39% was contracted in foreign currency, according to the ECLAC report. 51.7% of Colombia’s external public debt is in the hands of bondholders and another 36.8% was contracted with multilateral organizations, according to Banco de la República with information as of the end of 2023.
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