World Bank Reports Developing Countries' Debt Hits $9.4 Trillion

The World Bank Group's International Debt Report 2026 reveals that the external debt of developing countries surged by 5.5% to a record $9.4 trillion in 2025, marking the fastest increase since 2021. This rise is attributed to a significant jump in borrowing from private creditors and a nearly 35% increase in bond issuance from public entities, totaling $251 billion.

The most vulnerable countries, particularly those eligible for concessional financing from the World Bank Group's International Development Association (IDA), saw their external debt grow by 8.1% to $1.3 trillion. Haishan Fu, World Bank Group Chief Statistician, emphasized the need for responsible debt management to ensure future generations can thrive.

IDA-eligible countries faced an average interest rate of 8.2% on new private-creditor commitments in 2025, the highest since 1989. Despite high costs, demand for international bond financing remained strong, with low- and middle-income countries paying $1.4 trillion in principal and interest in 2025.