Developing countries’ external debt has surged 5.5% to a record $9.4 trillion in 2025, the fastest pace since 2021, according to the World Bank Group’s International Debt Report 2026.
The report noted that although access to international finance has improved, the price of finance has not, with debt burdens in the poorest nations threatening essential investments in people.
External debt grew 8.1% to $1.3 trillion in the most vulnerable countries eligible for concessional financing from the World Bank’s International Development Association, IDA.
World Bank Group Chief Statistician, Haishan Fu, observed that countries are borrowing more, paying more, and in many cases leaving less for long-term development.
“Managing debt responsibly means giving everyone—including future generations—a chance to thrive,” said Haishan, the Director of Development Data.
As of August, over 10 nations had exceeded their full-year 2025 issuance, while some returned to international markets, as low- and middle-income countries continue to seek bond financing despite the high costs.
Such countries paid $1.4 trillion in principal and interest in 2025, up 1.9%, while payments to bondholders climbed to $363 billion, partly reflecting debt buybacks and prepayments financed through new bond issues.
Between 2022 and 2025, developing countries paid $436 billion more in debt service than they received in new financing. However, net debt flows shifted in 2025, recording a net inflow of $45 billion for developing nations.