Governments in Chile and Peru should be able to live comfortably with a jump in their public debt-to-GDP ratios this year. Those in Colombia, Mexico and, to a greater extent, Brazil will struggle. The first port of call will probably be renewed austerity, which will drag on the pace of economic recoveries. But efforts to lower borrowing costs via financial repression are likely within the near future. For Argentina, a large debt restructuring, as well as money printing, look like the (familiar) policies of choice.
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