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World Bank Flags Deepening Debt Strain in Developing Nations as Costs Hit Records

Over half of low-income countries now face debt distress according to the lender.

Overview

  • The debt-servicing gap reached $741 billion over 2022–2024, the highest in more than five decades.
  • Interest payments climbed to a record $415.4 billion in 2024 as external debt hit $8.9 trillion.
  • Bond issuance resumed but typical yields hovered near 10%, while net bilateral lending fell 76% to $4.5 billion.
  • Countries reworked nearly $90 billion of obligations in 2024, with restructurings in Ghana, Zambia, Sri Lanka, Ukraine and Ethiopia and relief for Haiti and Somalia.
  • Multilateral support increased with the World Bank lending a record $36 billion, even as many governments leaned more on domestic markets where growing local borrowing risks crowding out private credit.