Developing nations' debt hits $9.4tn, World Bank says

Developing countries' external debt reached a record $9.4 trillion in 2025 after rising at its fastest pace since the pandemic, the World Bank said Thursday.

The bank's annual International Debt Report said most of the increase was driven by private financing. Borrowing from private creditors and bond issuance by public enterprises rose nearly 35 percent.

The World Bank said external debt grew the most among countries it classified as "the most vulnerable". It warned that high debt burdens in the poorest countries threaten to crowd out essential investment.

Haishan Fu, chief statistician at the World Bank Group, said the return of private lending to low- and middle-income countries was welcome, but that those countries were "borrowing more, paying more, and in many cases leaving less for long-term development".

The report said many governments issued new bonds to buy back maturing debt, often at higher interest rates. It said the poorest countries paid an average 8.2 percent on new loans or bonds to the private sector, the highest rate for that category since 1989.

Low- and middle-income countries paid $1.4 trillion in loan and interest repayments in 2025, up 1.9 percent and marking a fifth consecutive annual increase, the World Bank said.

The bank said developing countries paid $436 billion more in debt servicing than they received in new financing between 2022 and 2025. Fu warned that recent global shocks had left developing countries more constrained in their response to future disruptions.