Developing countries' external debt hit record $9.4 trillion in 2025, World Bank says
TLT•External debt in low- and middle-income countries rose 5.5% to a record $9.4 trillion in 2025, the World Bank said. Borrowing from private creditors and public bond issuance jumped nearly 35% to $251 billion.
1. Debt reached a record
External debt in low- and middle-income countries rose 5.5% to $9.4 trillion in 2025, the largest annual increase since 2021, the World Bank said. Debt grew fastest among countries eligible for International Development Association financing, rising 8.1% to $1.3 trillion.
2. Borrowing costs climbed
The poorest developing countries paid an average 8.2% on new private-creditor commitments and 9.4% on new bonds. Low- and middle-income countries paid $1.4 trillion in principal and interest in 2025, including $363 billion to private creditors, up 13.7%.
3. Investment risks flagged
The World Bank warned that debt service could crowd out investment in education, infrastructure, health and jobs. Developing countries paid $436 billion more in debt service than they received in new financing from 2022 to 2025, but recorded a net inflow of $45 billion in 2025.
