An analysis of public debt indicators in eight northern countries of Latin America reveals that Nicaragua and Honduras are the most vulnerable; Panama, the Dominican Republic, Costa Rica, and El Salvador are moderately vulnerable; while Mexico and Guatemala have debt levels that are not considered dangerous. Nonetheless, a subsequent review of four indicators of fiscal sustainability shows only Mexico to be well positioned under all criteria; Costa Rica and Guatemala display a number of minor problems, while various special circumstances explain the favourable results obtained by Nicaragua and the Dominican Republic; and El Salvador, Honduras and Panama will be unable to sustain their 2004 fiscal policy for very long. Lastly, analysis of the sensitivity of the debt to a sudden stop in foreign capital inflows suggests the need for a cautious attitude towards the future trend of the public debt in the face of rising international interest rates.