The external debt of developing countries jumped 5.5 percent to a record $9.4 trillion in 2025 — yaani $9,400 billion — the fastest pace of increase since 2021 and about four times the average recorded between 2022 and 2024, the World Bank Group said on Thursday, November 5, in its International Debt Report 2026. The Washington-based lender warned that the surge, driven largely by a return of private creditors, is coming at borrowing costs that threaten to crowd out essential spending on education, infrastructure, health and jobs.

Source: World Bank press release, Nov 5; Reuters, Nov 5 (Andrea Shalal), via 935 The Lloyd

$9.4 trillionRecord external debt of developing countries in 2025, up 5.5% — the fastest rise since 2021 (yaani $9,400 billion)
$251 billionBond issuance by public entities in 2025, up nearly 35% to its highest level in five years
$1.3 trillionExternal debt of the poorest, IDA-eligible countries, up 8.1% — the fastest growth of any group
8.2% / 9.4%Average rate IDA-eligible countries paid on new private-creditor commitments (highest since 1989) and on new bonds
$1.4 trillionPrincipal and interest paid by low- and middle-income countries in 2025 — the fifth straight annual increase
$763.5 billionIndia's external debt in 2025, up from $717.4 billion in 2024, per the Bank's country table

Private money is back — at a price

Private financing drove much of the increase, the Bank said: borrowing from private creditors jumped, bond markets reopened to many developing countries, and by mid-August 2026 more than ten developing countries had already surpassed their full-year 2025 bond issuance levels. Long-term debt flows reversed sharply, recording a net inflow of $45 billion in 2025 compared with a net outflow of $118 billion in 2024. But the Bank said borrowing through international bond markets in 2026 raises critical questions about whether the terms are sustainable and whether the capital raised is reaching the people and places that need it most.

Source: World Bank press release, Nov 5; Reuters, Nov 5, via 935 The Lloyd

The pressure is steepest for the poorest countries. Those eligible for concessional financing from the International Development Association (IDA), the World Bank's arm for poorer economies, saw their external debt grow 8.1 percent to $1.3 trillion — yaani $1,300 billion — while paying an average 8.2 percent on new private-creditor commitments, the highest rate since 1989, and 9.4 percent on new bonds. Haishan Fu, the World Bank Group's Chief Statistician and Director of Development Data, welcomed the return of private lending but warned that larger borrowing and repayment obligations could leave fewer resources for development; in a separate commentary with data official Evis Rucaj, the Bank argued that access to funding alone is not enough.

Source: World Bank press release, Nov 5; BizzBuzz, Nov 6

What is solid

  • Developing countries' external debt rose 5.5% to a record $9.4 trillion in 2025, the fastest pace since 2021 (World Bank International Debt Report 2026)
  • Bond issuance by public entities rose nearly 35% to $251 billion, the highest in five years, and private creditors drove much of the increase
  • IDA-eligible countries' debt rose 8.1% to $1.3 trillion; they paid an average 8.2% on new private commitments — the highest since 1989 — and 9.4% on new bonds
  • Low- and middle-income countries paid $1.4 trillion in principal and interest in 2025, a fifth consecutive annual increase; India's external debt was $763.5 billion

What is only claimed

  • Whether the new borrowing is sustainable, and whether the capital is reaching the people and places that need it most, is the Bank's own open question — not a settled finding; the report presents the return of private finance as both an opportunity and a risk

What happens next

The test now is what the borrowed money buys. With debt service already consuming $1.4 trillion a year and the poorest borrowers paying rates not seen since 1989, every new bond issued in 2026 adds to a repayment bill that competes directly with hospitals, schools, roads and water systems. For India — whose external debt rose to $763.5 billion, yaani about $764 billion — the figures are a reminder that even faster-growing economies are borrowing into the same expensive global market. Watch the Bank's country tables and finance ministries' 2026 issuance plans for whether borrowing slows, or the record rises again.