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Poor-Country Debt Peaks

Poor-Country Debt Peaks

The World Bank warned that external debt in emerging economies reached a record $9.4 trillion in 2025, while the poorest countries faced their highest borrowing costs since the 1980s. The average interest rate on new private loans to these countries was 8.2%, rising to 9.4% for bond issuance, compared with 5.5% for developing countries with stronger economies. The report noted that net debt flows rose to around $360 billion, warning that high borrowing costs are draining resources for development and that alternative financing arrangements and yield swaps carry risks related to collateral, refinancing and transparency.

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