Poorest Nations' Debt Hits Record $9.4tn, World Bank Reports
Developing countries now owe a record $9.4tn in external debt, with the poorest facing interest rates unseen since the late 1980s.
External debt owed by developing nations climbed to a record $9.4 trillion last year, according to new World Bank data, as soaring borrowing costs squeeze governments that can least afford them. The poorest countries are now paying the highest interest rates on that debt since the late 1980s, a burden that economists warn is diverting scarce public resources away from long-term investment in infrastructure, health, and education.
The figures arrive as the United Kingdom prepares to assume the presidency of the G20, a platform the government intends to use to push a fresh initiative on debt relief for lower-income nations. The effort signals a renewed international focus on a structural problem that has persisted for decades despite multiple rounds of relief agreements.
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Prime Minister Andy Burnham has framed the debt drive in explicitly historical terms, connecting the initiative to confronting the legacy of the transatlantic slave trade. That framing is likely to shape diplomatic conversations at the G20, adding a moral dimension to what is typically treated as a technical fiscal debate.
The cost of servicing external obligations consumes a growing share of government revenues in affected countries, limiting their capacity to respond to climate shocks, public-health crises, and other development challenges. Analysts note that the combination of elevated global interest rates and a strong dollar has compounded repayment pressures on nations that borrow in foreign currencies.
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