Debt reached a record while market borrowing accelerated
The World Bank’s International Debt Report 2026 says low- and middle-income countries’ external debt rose 5.5% to a record $9.4 trillion in 2025. Public-sector entities increased international bond issuance by roughly 35% to $251 billion.
More financing can help refinance maturities or fund investment, but a larger debt stock also increases exposure to interest rates, exchange rates and refinancing conditions. The aggregate does not mean every country’s debt grew at the same pace.
| Indicator | World Bank figure |
|---|---|
| LMIC external debt | $9.4T, up 5.5% |
| Public-entity bond issuance | $251B, up about 35% |
| Debt service | $1.4T |
| Payments to bondholders | $363B |
| Net financing flow | +$45B |
The poorest borrowers paid the highest new rates
Debt owed by countries eligible for the World Bank’s International Development Association rose 8.1% to $1.3 trillion. Their new private-credit commitments carried an average 8.2% rate, the highest since 1989, while new bonds averaged 9.4%.
IBRD-only borrowers paid an average 5.5% on new bonds. The 3.9-percentage-point gap between 9.4% and 5.5% illustrates how the countries with the least fiscal room can face the most expensive market access.
One positive year did not erase four years of net outflow
Developing countries paid $1.4 trillion in debt service during 2025, including $363 billion to bondholders. From 2022 through 2025, they paid creditors $436 billion more in principal and interest than they received in new financing.
The annual balance improved from a $118 billion net outflow in 2024 to a $45 billion net inflow in 2025—a $163 billion swing. That reversal is important, but it does not cancel the cumulative four-year transfer.
Method, currency effects and limits
What’s the Scoop With Broach compared the rates, calculated the 3.9-point spread and the $163 billion annual swing, and treated the report as news analysis rather than an original investigation. More than one-quarter of the $303 billion increase in public and publicly guaranteed debt reflected a weaker U.S. dollar, according to the World Bank.
Dollar-denominated totals can rise when other currencies strengthen even without equivalent new borrowing. Country-level sustainability depends on maturity, currency, revenue, reserves and loan terms; this global summary cannot diagnose any single borrower.
Sources and further reading
World Bank, developing-country external debt release, November 5, 2026 ↗
World Bank International Debt Report 2026 products ↗
World Bank Group headquarters photograph and CC BY-SA record ↗