Developing economies paid nearly $1T in interest in 2025, squeezing resources for development, says UN Trade and Development
Mucahithan Avcioglu 07 October 2026•Update: 07 October 2026
ISTANBUL
Some 3.7 billion people live in 51 developing countries where public debt interest payments exceed government spending on health or education, UN Trade and Development (UNCTAD) warned Wednesday.
Developing countries paid $995 billion in net interest on public debt in 2025, nearly three times the 2010 level, according to UNCTAD's "A World of Debt 2026: Rising debt costs and stalling development."
The median share of government revenue devoted to net interest reached 8.1%, almost double the level in 2010.
Global public debt climbed to $111 trillion in 2025, including $35 trillion owed by developing economies.
Developed countries held more than two-thirds of the total, although debt has grown faster in developing countries.
Higher costs squeeze development spending
UNCTAD said developing countries face structurally higher interest rates, compounded by recent conflicts and crises.
External financing has also become scarcer as bilateral lenders redirect development assistance toward domestic priorities and private creditors become more cautious.
Borrowing at rates comparable to developed economies could save developing countries around $500 billion annually, UNCTAD estimated.
The agency called for stronger financial safety nets, reversing declines in development assistance, expanding lending by development banks and improving national debt management.
Borrowing countries seek stronger voice
The Borrowers' Platform will hold its first Governing Council meeting in Bangkok on Oct. 12, on the sidelines of the IMF-World Bank Annual Meetings.
Launched in April, the initiative provides developing countries with a forum to share experience and strengthen cooperation on debt challenges, according to UNCTAD, which serves as its secretariat.
Members are expected to formalize their participation and elect a chair for the 2026-2027 annual cycle.
