dinero_admin In the Latin American region, the average public debt of the central government has experienced a reduction in 2024, although it remains at historically high levels. This decline of 3.9 percentage points of GDP compared to 2023, bringing the average to 51.2% of GDP as of december 2024, is a respite for economic stability. However, the focus is on countries that have achieved exceptional performance in this scenario, with El Salvador standing out as an example to follow.
El Salvador, together with Argentina and Nicaragua, is among the eight countries in the region that managed to reduce their public debt levels. While Argentina shows a significant drop, largely explained by the methodology used to construct the debt-to-GDP ratio, the Salvadoran case stands out for its efforts and the effectiveness of its fiscal policies.
This achievement is even more relevant considering that the Central American sub-region reached 46.9% of GDP in public debt in march 2024, a figure lower than the regional and South American average.
The reduction of central government debt in El Salvador is not only a sign of economic strength, but also generates confidence in international markets and attracts investment. Although regional debt still exceeds 50% of GDP, a level similar to that of two decades ago, the commitment of countries like El Salvador to fiscal discipline and the sustainability of their public finances is an engine for recovery and long-term growth.
This picture of improving public debt, also driven by the dynamism of nominal GDP in some countries, is a sign that, with the right policies and a focus on stability, Latin American nations can overcome economic challenges. El Salvador, with its remarkable debt reduction, positions itself as a benchmark for financial management, paving the way for a more prosperous future in the region.
