Developing nations’ foreign debt surges to record $9.4 tn

In 2025, the foreign debt of developing countries hit a record high of $9.4 trillion, according to the World Bank's latest International Debt Report. This increase marked the fastest pace since 2021, as reported on Thursday. The surge in debt was primarily driven by the return of private creditors to the market, while the poorest countries regained access to bond markets.

Despite improved access to international funds, borrowing costs for developing countries were at their highest level in decades. The report revealed that debt to foreign creditors rose by 5.5 percent in 2025 compared to the previous year. While access to international financing had improved, financing costs had not, posing a significant challenge for the poorest nations.

The report cautioned that the high debt burden in the poorest countries could crowd out essential investments that people urgently need. Private lending to these countries surged, with bond issuance by public bodies growing by more than a third to reach $251 billion. This marked the highest level in five years.