World Bank Says Developing-Country Debt Hit $9.4 Trillion

The World Bank said developing countries’ external debt reached a record $9.4 trillion in 2025, rising 5.5% as borrowing and debt-service costs remained high. The increase was the largest annual rise since 2021, according to the bank’s International Debt Report 2026. Debt grew fastest among countries eligible for concessional financing from the World Bank’s International Development Association (IDA). Their external debt increased 8.1% to $1.3 trillion. IDA-eligible countries paid an average 8.2% on new commitments from private creditors, the highest rate since 1989, and 9.4% on new bonds. Public-entity bond issuance rose nearly 35% to $251 billion, its highest level in five years, as international markets reopened to developing-country borrowers. Governments also issued bonds to buy back maturing debt and extend repayment schedules, often at higher interest rates without substantially reducing debt stocks. The World Bank reported that low- and middle-income countries paid $1.4 trillion in principal and interest in 2025, the fifth consecutive annual increase. Payments to bondholders reached $363 billion. From 2022 through 2025, developing countries paid $436 billion more in...