Global public debt has reached an unprecedented level, with developing countries facing disproportionate burdens according to the report A world of Debt Report by UNCTAD.

Key Highlights from the World of Debt Report 2025

• Global public debt hit a record $102 trillion in 2024.
• Although the  developing countries accounted for less than one-third of the total($31 trillion), their debt has grown twice as fast as that of developed economies since 2010.

• Wide regional disparity: Asia and Oceania: 24% of global public debt,  Latin America and the Caribbean: 5%, Africa: 2%
• The burden varies depending on debt maturity, financing terms, and inequities in the international financial system.
• Rising Cost of External Debt:
  • 50% of developing countries spent at least 6.5% of export revenues on servicing this debt.
  • Since 2020, developing countries have borrowed at 2 to 4 times the interest rates of the United States, inflating repayment costs and limiting resources for development.
• Negative Net Resource Transfers: In 2023, developing countries experienced a net outflow of $25 billion, paying more in debt servicing than they received in new external disbursements.
• Impact on Budgets and Development: 61 developing countries allocated 10% or more of government revenues to interest payments alone.
  • These payments are rising faster than spending on essential services like health and education.

UN’s Roadmap to Address Global Debt Challenges

• Inclusive Governance & Debt Framework Reform: Increase developing countries’ participation in global financial institutions and reform debt assessment tools to avoid delayed interventions.
• Crisis Liquidity Access: Expand access to emergency funds by boosting use of Special Drawing Rights, suspending IMF surcharges, easing emergency financing linked to quotas, and strengthening regional cooperation.
• Effective Debt Resolution Mechanism: Improve the G20 Common Framework by fixing eligibility gaps, enhancing creditor coordination, enforcing private sector participation, and including automatic debt suspension clauses.
• Stronger Concessional Finance & Support: Boost concessional funding and technical help via fulfilled aid pledges, expanded multilateral bank roles, local currency financing, and normalised debt pauses during crises.

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