World Bank Debt Report: $9.4 Trillion Owed, and the Price Is the Problem

The World Bank international debt report, published on November 5, 2026, found that external debt of developing countries jumped 5.5% to a record $9.4 trillion in 2025, the fastest pace since 2021. The bank’s central warning is that markets have reopened to poorer borrowers but at a price that is squeezing budgets. The findings matter for creditors, finance ministers and climate negotiators alike.

The International Debt Report is the World Bank Group’s annual survey of what low- and middle-income countries owe, to whom and on what terms. This year’s edition arrives as the International Monetary Fund (IMF) and central banks are already warning about strained public finances and rising yields.

What does the World Bank international debt report show?

According to the World Bank, the 2025 increase was about four times the 2022 to 2024 average. Debt grew fastest in the most vulnerable economies: external debt rose 8.1% to $1.3 trillion in countries eligible for concessional financing from the International Development Association (IDA).

Reuters reported that borrowing from private creditors and bond issuance by public entities rose nearly 35% to $251 billion, the highest level in five years. The same report said low- and middle-income countries paid $1.4 trillion in principal and interest in 2025, the fifth consecutive annual increase. Payments to private creditors rose 13.7% to $363 billion, Reuters added.

Across 2022 to 2025, the World Bank calculated that developing countries paid $436 billion more in debt service than they received in new financing. In other words, net transfers have run against borrowers for four straight years.

Why is the cost of borrowing the central issue?

The World Bank frames the findings as a paradox. In its press release, it said that access to international finance has improved, but the price of finance has not. A World Bank data blog put numbers on the divide: new private lending to IDA-eligible countries carried an average rate of 8.2% in 2025, and the poorest and most vulnerable countries now face borrowing costs not seen since the late 1980s.

Middle-income borrowers fared better. Countries eligible only for non-concessional IBRD loans paid an average of 5.5% on new bonds, down from 5.8% the previous year.

Haishan Fu, the World Bank Group’s chief statistician and director of development data, said, as quoted by The Irish Times: “these countries are borrowing more, paying more, and in many cases leaving less for long-term development”. The report also warned that heavier debt service could weaken investment and leave countries more exposed to shocks, according to Reuters.

Which countries and creditors are most exposed?

The report’s country tables show how the aggregate plays out. Pakistan’s external debt, according to Dawn’s reading of the data, climbed from $68.7 billion in 2015 to $135.1 billion in 2025. China was Pakistan’s largest individual creditor with $22.4 billion outstanding, ahead of the World Bank with $19.2 billion and the Asian Development Bank with $16.83 billion.

Reporting differs slightly on the debt-service trend. Reuters described a fifth consecutive annual rise in total payments, while TASS, citing the report, said payments of $1.4 trillion were up 1.9% from the previous year. The Irish Times headline referred to the “poorest” countries, but the $9.4 trillion total covers all low- and middle-income economies, with the IDA group a subset.

How does this fit with the IMF’s warnings and the rate cycle?

The report follows a run of warnings from the IMF. Its Global Financial Stability Report, released during the Bangkok annual meetings, cautioned that sovereign bond risk could deteriorate, including “a sharp rise in sovereign bond yields”. IMF fiscal economists also projected that emerging economies will spend almost 11% of tax revenue on debt service over the next five years, up from about 7% between 2011 and 2019.

On the restructuring side, the Global Sovereign Debt Roundtable, co-chaired by IMF Managing Director Kristalina Georgieva, World Bank Group President Ajay Banga and a US Treasury official, met on October 14 in Bangkok to review progress on improving debt restructuring processes and timelines.

Rates are not easing. On November 5, the Bank of England announced its first rate hike since 2023, raising its key rate by 25 basis points to 4%, citing energy costs linked to Middle East conflict. That decision, covered in an earlier Intelligence Report article on the pound before the BoE, reflects a wider environment in which higher energy-driven inflation keeps borrowing costs elevated. The Irish Times noted that debt pressure has also triggered a bond-market rout in Europe, centred on France.

What does it mean for climate finance?

The debt data arrives as COP31 prepares to open. The summit will be hosted by Türkiye in Antalya from 9 to 20 November 2026. One preview noted that the plan agreed in Belém to reach $1.3 trillion a year in climate finance by 2035 leans heavily on the development banks, which makes lender balance sheets and borrower debt space central to delivery. For the funding gap on adaptation specifically, see this analysis of the Adaptation Gap Report.

Banga told the Bangkok meetings that the World Bank more than tripled its private capital mobilization in fiscal year 2026 using reformed guarantee instruments and blended finance structures, according to Xinhua. The new debt report suggests that mobilizing private money does not by itself make it cheap.

What to watch

• November 9 to 20, 2026: COP31 in Antalya. The summit’s thematic programme includes a Finance and Trade day on November 13, a likely venue for debt-for-climate and cost-of-capital proposals.
• December 17, 2026: the Bank of England’s next rate decision, due on that date, as a gauge of whether global borrowing costs keep rising.
• Early 2027 bond issuance: the World Bank said early 2026 data show continued demand for international bond financing from low- and middle-income countries despite the high costs. New issues and their pricing will show whether the 8.2% rate for the poorest borrowers eases.
• Restructuring progress: follow-up work from the Global Sovereign Debt Roundtable and any new IMF programme or restructuring announcements.

Frequently asked questions

Sources

• Developing Countries' External Debt Surges to Record $9.4 Trillion (World Bank press release)
• Access to finance is not enough: What the International Debt Report 2026 tells us (World Bank blog)
• Developing countries' external debt hit record $9.4 trillion in 2025, World Bank says (Reuters via AOL)
• Debt of poorest countries hits record $9.4tn, World Bank reveals (The Irish Times)
• Country's external debt nearly doubles in a decade (Dawn)
• Total debt of developing countries hits record $9.4 trillion (TASS)
• IMF warns bond yields could see a 'disorderly' spike as debt, inflation risks worsen (CNBC)
• IMF warns higher borrowing costs are straining public finances worldwide (SCMP)
• Global Sovereign Debt Roundtable, 7th Co-Chairs Progress Report (IMF)
• IMF, World Bank warn of mounting debt, divergent AI boom at Bangkok annual meetings (Xinhua)

Top image: Shiny Things / Wikimedia Commons (CC BY 2.0)

This article was produced by the Intelligence Report Desk. Sources are linked below.