The external debt stock of developing countries climbed 5.5 percent to a record $9.4 trillion in 2025 as private creditors returned to emerging markets and bond issuance rebounded, according to a World Bank report.
The annual increase marked the fastest expansion since 2021 and was roughly four times the 0.5 percent average annual growth recorded between 2022 and 2024, the Washington-based lender said in its International Debt Report 2026.
Although access to global financial markets improved, borrowing costs remained historically elevated, threatening to crowd out critical investments in health care, education and infrastructure across the poorest nations.
“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, chief statistician of the World Bank Group.
Private financing drove the bulk of the expansion in 2025, with public-sector bond issuance climbing 34.6 percent to $250.6 billion, the highest volume since 2021.
Total debt owed by low- and middle-income countries to private creditors rose 5.2 percent to $5 trillion, accelerating sharply from the 0.6 percent growth recorded in 2024.
Developing countries paid a record $1.4 trillion in principal and interest payments in 2025, up 1.9 percent year-on-year, marking a fifth consecutive annual increase.
Payments to bondholders climbed 13.7 percent to $363.1 billion, partly reflecting debt buybacks and early refinancing operations.
