# Developing Country Debt Reaches Record $9.4 Trillion in 2025 Amid Rising Burdens on the Poorest Nations

- Link: https://www.thailand-business-news.com/banking/338948-developing-country-debt-reaches-record-9-4-trillion-in-2025-amid-rising-burdens-on-the-poorest-nations
- Published: 2026-11-05T21:31:00+07:00
- Author: World Bank

Private creditors returned in force and bond markets reopened, but poorest countries’
borrowing faced highest costs in decades.

**WASHINGTON, Nov. 5, 2026**—External debt of developing countries jumped 5.5% to
a record $9.4 trillion in 2025, the fastest pace since 2021 and about four times
the 2022–24 average, according to the World Bank Group’s _International Debt Report
2026._ Access to international finance has improved, but the price of finance has
not, and threaten to crowd out essential investments in people.

ADVERTISEMENT

Private financing drove much of the increase. Borrowing from private creditors jumped
and bond issuance from public entities rose nearly 35% to $251 billion, the highest
level in five years as markets reopened to many developing countries. External debt
grew fastest among the most vulnerable countries, increasing 8.1% to $1.3 trillion
in countries eligible for concessional financing from the World Bank Group’s International
Development Association (IDA).

_“The return of private lending to low- and middle-income countries is welcome, 
but these countries are borrowing more, paying more, and in many cases leaving less
for long-term development,” said **Haishan Fu, World Bank Group Chief Statistician
and Director of Development Data**. “Managing debt responsibly means giving everyone—
including future generations—a chance to thrive.”_

Many governments issued new bonds to buy back maturing debt, smoothing repayment
profiles without significantly reducing debt stocks, often at higher interest rates.
Early 2026 data show continued demand for international bond financing from low-
and middle-income countries despite the high costs. **By mid-August, more than 10
countries had exceeded their full-year 2025 issuance, while several others returned
to international markets.**

IDA-eligible countries paid an average of 8.2% on new private-creditor commitments
in 2025—the highest rate since 1989—and 9.4% on new bonds. The gap between the rates
IDA-eligible countries paid to official and private creditors widened from 3.4 percentage
points in 2016 to 5.5 percentage points in 2025. 

In comparison, countries eligible for only non-concessional loans from the World
Bank Group’s International Bank for Reconstruction and Development (IBRD) paid an
average of 5.5% on new bonds, an improvement from the 5.8% rate the previous year.

### Related**Posts**

###  󠀁[Developing Country Debt Reaches Record $9.4 Trillion in 2025 Amid Rising Burdens on the Poorest Nations](https://www.thailand-business-news.com/banking/338948-developing-country-debt-reaches-record-9-4-trillion-in-2025-amid-rising-burdens-on-the-poorest-nations)󠁿

###  󠀁[Bank of Thailand Plans Tighter Rules for Buy Now, Pay Later Services](https://www.thailand-business-news.com/banking/337853-bank-of-thailand-plans-tighter-rules-for-buy-now-pay-later-services)󠁿

###  󠀁[TAT Expands Cross-Border QR Payments “Scan Thailand Pay Like A Local”](https://www.thailand-business-news.com/business/338513-tat-expands-cross-border-qr-payments-scan-thailand-pay-like-a-local-in-bangkok)󠁿

###  󠀁[Thailand Business News — Morning Briefing | Tuesday, 3 November 2026 | Thailand, ASEAN and Global Markets](https://www.thailand-business-news.com/news/338217-thailand-business-news-morning-briefing-tuesday-3-november-2026-thailand-asean-and-global-markets)󠁿

Debt-service pressures remained severe amid elevated global interest rates. Low-
and middle-income countries paid $1.4 trillion in principal and interest in 2025,
up 1.9% and marking a fifth consecutive annual increase. Payments to bondholders
climbed to $363 billion, partly reflecting debt buybacks and prepayments financed
through new bond issues.

**Between 2022 through 2025, developing countries paid $436 billion more in debt
service than they received in new financing.** The direction shifted in 2025, however,
as long-term debt flows turned from a $118 billion net outflow in 2024 to a net 
inflow of $45 billion.

Currency movements also played a role in the reported increase. More than a quarter
of the $303 billion increase in public and publicly guaranteed debt reflected the
weaker US dollar, which raised the dollar value of debt denominated in other currencies.
For several of the largest concessional borrowers, these currency effects outweighed
the principal they repaid in 2025, leaving reported debt higher despite continued
servicing.