Overview
- The World Bank's International Debt Report released on Thursday showed low- and middle-income countries' external debt rose 5.5% in 2025 to $9.4 trillion, the largest annual increase since 2021.
- The poorest borrowers faced sharply higher costs in 2025 with average new private-creditor commitments at 8.2% and new bonds at 9.4%, the highest private rates since 1989.
- Developing countries paid $1.4 trillion in principal and interest in 2025, including $363 billion to private creditors, and many governments issued new bonds to refinance maturing debt at higher rates.
- Pakistan's external debt nearly doubled over 2015–2025 to $135.1 billion with public and publicly guaranteed loans totaling about $107.1 billion, China the biggest bilateral creditor at roughly $22.4 billion, and official loans carrying much longer maturities and lower rates than private finance.
- The bank urged better debt transparency, reconciled creditor records and stronger public debt management because higher costs and concentrated creditors raise refinancing risks and could crowd out vital public services.