Three years after the onset of the COVID-19 pandemic, countries in Latin America and the Caribbean (LAC) are still dealing with its economic consequences. Currently, one of the main points of concern is the excessive level of public indebtedness and the risk it represents to economic stability and economic growth. This year the IDB published its flagship study Development in the Americas – Dealing with Debt: Less Risk for More Growth in Latin America and the Caribbean. It shows that the pandemic accelerated the pace of public indebtedness and slowed economic growth in the region, a trend that had already been emerging in previous years. Since 2020 public debt levels rose by 15 percentage points (pp) of the region’s gross domestic product, to 71 percent. That adds up to the 18-percentage point increase between 2014 and 2019. Unfortunately, increased debt has not helped boost growth nor overall economic productivity. Figure 1 below shows that economic growth has been slowing down in the region because of a reduction in total factor productivity, especially of labor and capital. Economic growth in the region has gradually slipped to a mere average of 2 to 2.5% in the medium term. […]