Developing Countries’ Debt Hit Record $9.4 Trillion, Says World Bank

World Bank – (Special Correspondent/Web Desk) – Developing countries’ debt hit record $9.4 trillion in 2025, the World Bank said on Thursday. External debt in low- and middle-income countries rose 5.5 percent in a single year.

The Washington-based lender shared the numbers in its yearly International Debt Report. It said this was the biggest annual jump since 2021, just after the pandemic.

Private money drove most of the rise. Borrowing from private creditors and bonds sold by public entities grew nearly 35 percent to $251 billion. That is the highest level in five years.

The poorest countries felt the pressure most. Their external debt grew 8.1 percent to $1.3 trillion.

They also paid a steep price. On new private loans, these countries paid an average of 8.2 percent. On new bonds, they paid 9.4 percent. Both are the highest in decades.

Richer developing countries paid far less. Those not eligible for cheap loans from the International Development Association paid 5.5 percent on new bonds, down from 5.8 percent in 2024.

Many governments sold new bonds to repay old debt that was due. This gave them more time, but the total debt barely fell, and the interest was often higher.

Repayments were heavy too. Developing countries paid $1.4 trillion in principal and interest in 2025, the fifth rise in a row. Payments to private lenders alone jumped 13.7 percent to $363 billion.

A weaker US dollar also made things worse. It raised the dollar value of debt owed in other currencies and explained over 28 percent of the debt increase.

Haishan Fu, the Bank’s chief statistician, welcomed the return of private lending. But she said countries are borrowing more, paying more and often leaving less for long-term growth.

The Bank warned that high debt costs could mean weaker investment and fewer opportunities. It also called for more openness on debt deals, so that a country’s full debt picture is easier to see.