Developing Countries' External Debt Hits Record $9.4 Trillion, Borrowing Costs Soar
Private lending and bond issuance rose nearly 35% to $251 billion as the poorest countries paid the highest rates in decades, the World Bank said.
- On Thursday, the World Bank reported that external debt for low- and middle-income countries surged 5.5% to a record $9.4 trillion in 2025, marking the largest annual increase since the COVID pandemic.
- Debt service payments climbed to $1.4 trillion in 2025, the fifth consecutive annual rise, driven by a 13.7% surge in payments to private creditors reaching $363 billion.
- Among International Development Association-eligible countries, debt grew 8.1% to $1.3 trillion in 2025, while the poorest nations face 8.2% interest rates on private-creditor commitments, the highest since 1989.
- World Bank chief statistician Haishan Fu said these nations are "borrowing more, paying more, and in many cases leaving less for long-term development," threatening investments in health and education.
- The dollar's depreciation accounted for over 28% of the debt increase, complicating repayment obligations. Despite these pressures, the report cited a net inflow of $45 billion in 2025, reversing prior years of outflows.
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"The return of private credit to low- and middle-income countries is welcome, but these countries are contracting more debt, paying more and, in many cases, leaving fewer resources for long-term development," said World Bank's head of statistics and development data, Haishan Fu, in the report.
Times of India
Insider PaperDeveloping countries' debt hit record $9.4 trillion in 2025: World Bank
Most of the increase was driven by private financing, with borrowing from private creditors and bond issuance by public enterprises rising nearly 35 percent, the Bank's annual International Debt Report showed.
Developing countries’ external debt hits record $9.4tn — World Bank
Developing countries’ external debt rose to a record $9.4tn in 2025 due to increased private borrowing and higher interest rates, the World Bank reports. Read More: https://punchng.com/developing-countries-external-debt-hits-record-9-4tn-world-bank/
Poorer Nations Face Highest Debt Costs Since 1989, World Bank Says
Emerging economies’ external debt climbed to a record $9.4 trillion in 2025, according to the World Bank, boosted in part by the poorest nations facing borrowing cost levels unseen since the 1980s.
Developing countries' external debt hit record $9.4 trillion in 2025, World Bank says
Low- and middle-income countries are borrowing more and paying more for new debt, with external debt surging 5.5% to a record $9.4 trillion in 2025, the World Bank said on Thursday.
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