Developing Countries' External Debt Reaches Record $9.4 Trillion in 2025, World Bank Reports
The external debt of developing countries surged by 5.5% to a record $9.4 trillion in 2025, marking the fastest increase since 2021 and approximately four times the average growth rate observed between 2022 and 2024. This data comes from the World Bank Group’s International Debt Report 2026. The report highlights that while access to international finance has improved for these nations, the cost of borrowing has not, leading to significant debt burdens that threaten essential investments in human capital. Private financing was a primary driver of this increase, with borrowing from private creditors jumping and bond issuance from public entities rising by nearly 35% to $251 billion, the highest level in five years. The most vulnerable countries, those eligible for concessional financing from the World Bank Group’s International Development Association (IDA), experienced an 8.1% increase in external debt, reaching $1.3 trillion.
