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Developing countries' external debt hits record $9.4 trillion

Developing countries' external debt reached a record $9.4 trillion in 2025, marking a 5.5% increase and the fastest growth rate since 2021, according to the World Bank Group’s International Debt Report 2026.

The surge was primarily driven by increased borrowing from private creditors and a nearly 35% rise in public entity bond issuances, which reached $251 billion, the highest level in five years. While access to international markets has improved, the cost of financing remains high.

In the most vulnerable nations, specifically those eligible for International Development Association (IDA) concessional financing, external debt grew by 8.1% to $1.3 trillion. These countries faced an average interest rate of 8.2% on new private-creditor commitments, the highest level since the late 1980s, while new bond issuances averaged 9.4%.

World Bank Chief Statistician Haishan Fu noted that while the return of private lending is a positive sign, low- and middle-income countries are borrowing more and paying more, which may reduce the resources available for long-term development and essential human capital investments.

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Cameroon · China · France · Haishan Fu · International Development Association · International Monetary Fund · Morocco · Nigeria · OECD · World Bank · World Bank Group

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