Low Growth, Limited Appetite For Austerity Will Keep Fiscal Deficits Wide Across Latin America

• Fitch Solutions expects Latin American governments will run structurally wider fiscal deficits following the economic shock of the COVID-19 pandemic as governments seek to avoid unpopular cuts to public spending.
• Among Latin America’s largest markets, it expects that Colombia and Peru will adopt a higher-spending model in the medium term, because of rising demands for public provision of social services.
• Most governments across the region will enjoy low borrowing costs and robust access to financing over the coming quarters, underpinning the agency’s view for an extended period of wider deficits.

(Source: Fitch Solutions)