Global public debt soared to an all-time high of $102 trillion in 2024, with developing countries shouldering nearly a third of that burden, according to a new report by the United Nations Conference on Trade and Development (UNCTAD). The findings, published in the latest edition of “A World of Debt”, raise alarms about the growing strain on developing nations’ budgets, as $921 billion in interest payments threatens to crowd out essential public services.
The report highlights a stark and worsening trend: public debt in developing countries has grown twice as fast as in wealthier nations since 2010, driven largely by rising borrowing costs and systemic inequalities in the global financial system.
“Debt can be a powerful tool to finance infrastructure and improve lives. But when it becomes too large or too costly, it holds back economies and undermines development,” UNCTAD stated.
Stark Inequalities in Global Debt Landscape
UNCTAD’s data reveals that Asia and Oceania hold 24% of total global public debt, followed by Latin America and the Caribbean (5%) and Africa (2%). The disparity is not just in volume, but also in cost: since 2020, many developing nations have been borrowing at interest rates two to four times higher than those paid by the United States.
In 2023, developing countries paid $487 billion to foreign creditors, while receiving $25 billion less in new debt disbursements — continuing a negative trend of net debt outflows. This financing imbalance is eroding their ability to invest in development.
A record 61 developing countries now spend at least 10% of their government revenues on interest payments, UNCTAD found. As a result, 3.4 billion people currently live in countries where more is spent on debt interest than on health or education.
Structural Reforms Urgently Needed
UNCTAD warns that this growing debt burden, coupled with low global growth, high interest rates, and mounting uncertainty, is pushing many nations further from achieving the Sustainable Development Goals (SDGs).
The report comes ahead of the UN’s 4th International Conference on Financing for Development, which UNCTAD calls a “once-in-a-decade opportunity” to enact sweeping reforms.
To address the debt crisis, UNCTAD calls for:
- Inclusive global financial governance, giving developing countries a real voice in decision-making.
- Improved access to liquidity, including better use of IMF Special Drawing Rights, suspending surcharges, and enabling greater South-South cooperation.
- A new international debt resolution mechanism that goes beyond the current G20 Common Framework, which UNCTAD deems insufficient.
- Affordable finance and technical assistance, including full delivery on aid and climate finance pledges, and reform of multilateral development banks.
A Shrinking Fiscal Space
The report underscores that the current system is pushing developing economies into a vicious cycle of borrowing just to stay afloat, with long-term consequences for global stability and human development.
“Rising debt, falling investment, and shrinking aid are converging to create a perfect storm,” UNCTAD warned. “Without urgent action, the global community risks a deepening divide between rich and poor — and a failure to meet the basic needs of billions.”
As the world prepares for the Financing for Development summit, the UN agency emphasized that the time for incremental change is over. Structural reform, it says, is not just necessary — it is urgent.
