The World Bank’s International Debt Report 2026 describes a recovery in access to borrowing—not a resolution of developing countries’ debt pressures: private finance returned, but debt stocks, repayment obligations and borrowing costs remained high, especially for the poorest countries. Its central warning is that more available credit does not necessarily mean affordable finance or more resources for development.3411

• Debt accumulation accelerated. Low- and middle-income countries’ external debt rose 5.5% in 2025 to a record $9.4 trillion—the fastest growth since 2021 and roughly four times the 2022–24 average. Countries eligible for International Development Association (IDA) support experienced an even faster 8.1% increase, to $1.3 trillion.311

• The poorest borrowers faced a widening cost disadvantage. IDA-eligible countries paid an average 8.2% on new private-creditor borrowing, the highest since 1989, and 9.4% on new bonds. Their official–private lending-rate gap widened from 3.4 percentage points in 2016 to 5.5 points, whereas new-bond rates for non-concessional borrowers declined from 5.8% to 5.5%.3

• Bond-market reopening mainly provided breathing room. Public-entity bond issuance increased nearly 35% to $251 billion. Refinancing extended repayment schedules without substantially reducing outstanding debt, often replacing existing obligations with higher-interest borrowing; issuance momentum continued through mid-August 2026.311

• Repayments continued to absorb enormous resources. Debt-service payments rose for a fifth consecutive year to $1.4 trillion, including a 13.7% increase in payments to private creditors to $363 billion. During 2022–25, developing countries paid $436 billion more in principal and interest than they received in new financing.34 Net long-term debt flows nevertheless improved from a $118 billion outflow in 2024 to a $45 billion inflow in 2025—an annual recovery that did not erase the preceding financing drain.3

• Exchange-rate valuation also increased reported debt. A weaker dollar accounted for more than one-quarter of the $303 billion increase in public and publicly guaranteed external debt. For several large concessional borrowers, these valuation increases exceeded principal repayments, illustrating that a rising dollar-denominated debt stock does not solely reflect fresh borrowing.3

• The development and transparency risks remain substantial. The Bank warns that expensive debt can crowd out education, infrastructure, health and job creation. Opaque creditors, increasingly complex instruments and guarantees make it harder to assess liabilities, sustainability and whether borrowed money benefits those most in need.3411

Taken together, the findings point to improved short-term financing access alongside persistent—and unequal—long-term debt vulnerability, rather than a broad return to affordable, sustainable borrowing.34

The World Bank’s International Debt Report 2026 describes a recovery in access to borrowing—not a resolution of developing countries’ debt pressures: private finance returned, but debt stocks, repayment obligations and borrowing costs remained high, especially for the poorest countries. Its central warning is that more available credit does not necessarily mean affordable finance or more resources for development.3411

• Debt accumulation accelerated. Low- and middle-income countries’ external debt rose 5.5% in 2025 to a record $9.4 trillion—the fastest growth since 2021 and roughly four times the 2022–24 average. Countries eligible for International Development Association (IDA) support experienced an even faster 8.1% increase, to $1.3 trillion.311

• The poorest borrowers faced a widening cost disadvantage. IDA-eligible countries paid an average 8.2% on new private-creditor borrowing, the highest since 1989, and 9.4% on new bonds. Their official–private lending-rate gap widened from 3.4 percentage points in 2016 to 5.5 points, whereas new-bond rates for non-concessional borrowers declined from 5.8% to 5.5%.3

• Bond-market reopening mainly provided breathing room. Public-entity bond issuance increased nearly 35% to $251 billion. Refinancing extended repayment schedules without substantially reducing outstanding debt, often replacing existing obligations with higher-interest borrowing; issuance momentum continued through mid-August 2026.311

• Repayments continued to absorb enormous resources. Debt-service payments rose for a fifth consecutive year to $1.4 trillion, including a 13.7% increase in payments to private creditors to $363 billion. During 2022–25, developing countries paid $436 billion more in principal and interest than they received in new financing.34 Net long-term debt flows nevertheless improved from a $118 billion outflow in 2024 to a $45 billion inflow in 2025—an annual recovery that did not erase the preceding financing drain.3

• Exchange-rate valuation also increased reported debt. A weaker dollar accounted for more than one-quarter of the $303 billion increase in public and publicly guaranteed external debt. For several large concessional borrowers, these valuation increases exceeded principal repayments, illustrating that a rising dollar-denominated debt stock does not solely reflect fresh borrowing.3

• The development and transparency risks remain substantial. The Bank warns that expensive debt can crowd out education, infrastructure, health and job creation. Opaque creditors, increasingly complex instruments and guarantees make it harder to assess liabilities, sustainability and whether borrowed money benefits those most in need.3411

Taken together, the findings point to improved short-term financing access alongside persistent—and unequal—long-term debt vulnerability, rather than a broad return to affordable, sustainable borrowing.34