Developing Nations’ Debt Surpasses $9.4 Trillion in 2025

The World Bank reported that external debt owed by low- and middle-income countries reached a record $9.4 trillion in 2025, marking a 5.5% increase from the previous year. This rise was driven by higher borrowing from private creditors and the reopening of international bond markets.

According to the International Debt Report 2026, the rate of debt growth was the fastest since 2021. The poorest countries experienced some of their highest borrowing costs in nearly four decades, raising concerns about financial sustainability.

Debt-service payments by low- and middle-income countries increased by 1.9% to $1.4 trillion in 2025, continuing a five-year trend. The World Bank warned that these rising repayment obligations could limit government resources for critical development areas like infrastructure and education.