A World of Debt 2025
A world
of debt
Report 2025
It is time for reform
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Why it matters?
Public debt can be vital for development. Governments use it to finance expenditures, protect and invest in their people and pave the way to a better future. However, when public debt grows excessively or its costs outweigh its benefits, it becomes a heavy burden. This is precisely what is happening across the developing world today.
Global public debt reached a record high of $102 trillion in 2024. Although public debt in developing countries accounted for less than one third of the total – $31 trillion – it has grown twice as fast as in developed economies since 2010.
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There is a stark contrast among developing regions. Asia and Oceania hold 24% of global public debt, followed by Latin America and the Caribbean (5%), and Africa (2%). The burden of this debt varies significantly based on the price and maturity of the debt finance countries have access to, and is further exacerbated by the inequality embedded in the international financial architecture.
Developing countries are now facing a high and growing cost of external public debt. Debt service on external public debt reached $487 billion in 2023. Half of developing countries were paying at least 6.5% of export revenues to service external public debt.
This dynamic is largely a result of high borrowing costs, which increase the resources needed to pay creditors, making it difficult for developing countries to finance investments. Since 2020, developing regions have been borrowing at rates that are two to four times higher than those for the United States.
Moreover, developing countries experienced a net resource outflow for the second year in a row. In 2023, they paid $25 billion more to their external creditors in debt servicing than they received in fresh disbursements, resulting in a negative net resource transfer.
The impact of these trends on development is a major concern, as people pay the price. Persistently high interest rates, weak global economic prospects and heightened uncertainty are having a direct impact on public budgets. Developing countries’ net interest payments on public debt reached $921 billion in 2024, a 10% increase compared to 2023. In the same vein, a record 61 developing countries allocated 10% or more of government revenues to interest payments.
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Developing countries’ interest payments are not only growing rapidly but also outpacing growth in critical public expenditures, such as on health and education. As a consequence, in many developing countries, the need to service existing obligations is constraining spending in other key areas essential for sustainable development.
Overall, a total of 3.4 billion people live in countries that spend more on interest payments than on either health or education.
Developing countries must not be forced to choose between servicing their debt or serving their people. There is a pressing need to reform the international financial architecture, encompassing:
- Making the system more inclusive and development-oriented
- Enhancing the availability of liquidity in times of crisis
- Creating an effective debt workout mechanism that addresses current deficiencies
- Providing more and better concessional finance and technical assistance to support countries in tackling the high cost of debt
The world has long been talking about reform. It is time to move from conversation to action.
Developing countries must not be forced to choose between servicing their debt or serving their people. There is a pressing need to reform the international financial architecture, encompassing:
- Making the system more inclusive and development-oriented
- Enhancing the availability of liquidity in times of crisis
- Creating an effective debt workout mechanism that addresses current deficiencies
- Providing more and better concessional finance and technical assistance to support countries in tackling the high cost of debt
The world has long been talking about reform. It is time to move from conversation to action.
Key statistics
$ 31 trillion
Developing countries’ public debt in 2024
$ 921 billion
Developing countries’ net interest payments on public debt in 2024
61 developing countries
Spend more than 10% of government revenues on net interest payments
$ 25 billion
Negative net resource transfer of developing countries in 2024, paying more to external creditors than they received in new disbursements
46 developing countries
Spend more on interest payments than on either health or education
3.4 billion people
Live in countries that spend more on interest payments than on either health or education