Washington (United States) (AFP) - Public debt in developing countries reached a new record level in 2025 at about 9,400 billion dollars, marking the highest increase since the Covid-19 pandemic, according to what the World Bank announced Thursday.

Published on: 05/11/2026 - 17:19

The “International Debt Report” revealed that the indebtedness of developing countries rose by 5.5 percent in 2025, meaning that it increased three times compared to the levels recorded between 2022 and 2024, while the rise in interest rates casts a shadow over the sovereign debt in all countries.

This increase has repercussions on public finances in developing countries, which paid an additional amount in 2025, a total of $436 billion, compared to what was the case in 2022, to cover loans and interest.

In addition to higher costs, the problem is that higher debt “ultimately affects households due to lower investments, fewer opportunities, and increased vulnerability to external shocks,” said Heshan Fore, chief statistician at the World Bank, in the report.

She pointed out that "during these periods of external shocks, a large segment of the population of the most indebted countries is unable to afford adequate meals."

The debt of the most vulnerable countries has increased at a rapid pace, exceeding 8.1 percent within a year, to reach $1,300 billion.

Interest on issuances offered also rose with rates equivalent to 8.2 percent on average from private lenders, which is the highest rate for these countries since 1989.

This rise is accelerating with bonds with an average interest rate of 9.4 percent.

There is no doubt that “low- and middle-income countries can obtain private loans,” but at the same time, “they borrow more and pay back more, and the margin of development declines in the long term.”

On the other hand, countries that do not benefit from low-interest loans from international financial institutions saw the rates applied to issuances decline to 5.5 percent in 2025, declining by 0.3 points compared to the previous year.

The risk allowance imposed by the private borrowing sector is not the only cost that has increased in debt borrowed from developing countries, which usually borrow in foreign currencies and must take into account exchange rate fluctuations in their budgets.

The decline of the dollar two years ago caused an increase in the cost of debts borrowed in foreign currencies, which increased the burden on the finances of the countries concerned.

© 2026 AFP

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