Developing countries' external debt hit record $9.4 trillion in 2025, World Bank says

External debt among low- and middle-income countries hit a record $9.4 trillion in 2025, rising 5.5% year-on-year, the World Bank said on Nov. 5. The increase—largest since 2021—adds pressure on budgets already strained by higher borrowing costs. The report warns the jump could crowd out spending on education, infrastructure, health and jobs. While access to international finance improved, the poorest countries face steep costs: 8.2% on average for new private-creditor commitments and 9.4% on new bonds, versus 5.5% for non-IDA countries. Borrowing from private creditors and bond issuance rose nearly 35% to $251 billion.