The United Nations Conference on Trade and Development (UNCTAD) says global public debt reached $111 trillion in 2025, up sharply from $49 trillion in 2010, and that the cost of servicing that debt is pulling money away from health, education and long-term investment in poorer economies, according to Arise News.
In its latest "World of debt" publication, the UN agency reported that interest payments on external public debt have outstripped net new lending to developing countries since 2022, Arise News reports.
Why it matters
The finding matters because it inverts what borrowing is supposed to do. UNCTAD's report states that debt should allow countries to invest in their future, but in many developing economies the servicing of external debt now exceeds new inflows — meaning money is flowing out faster than it arrives.
Arise News reports that interest payments in 51 developing countries have surpassed what those governments spend on health or on education. That figure, cited across coverage of the report, puts the trade-off in concrete terms: every dollar committed to creditors is a dollar not available for hospitals, schools or infrastructure.
UNCTAD also estimates that developing countries could free up roughly $500 billion a year in interest payments if they were able to borrow at the rates paid by developed economies. That gap is the core of the agency's argument.
The rate gap driving the squeeze
The report attributes much of the pressure to a divergence in borrowing costs. According to UNCTAD, developing countries face average public debt interest rates of 5.2 per cent, while developed economies pay 2.2 per cent — less than half.
That difference compounds over time. UNCTAD says interest payments across developing countries climbed from $363 billion in 2010 to nearly $1 trillion in 2025. Arise News reports the agency warned that higher and persistent borrowing costs are constraining public finances across developing economies and weakening debt's role as a tool for future investment.
The distribution of the $111 trillion total is also uneven. UNCTAD says developed economies account for more than two-thirds of global public debt, but that debt has been rising faster in developing countries — a combination that leaves poorer nations with a smaller share of the stock and a heavier share of the burden.
UNCTAD's assessment is that rising borrowing costs are draining funds that would otherwise go to health, education and investment. The agency's warning has been echoed in separate coverage, including reporting from Anadolu Ajansı on the 51-country figure for interest payments exceeding health or education spending, and from Daily News on concerns that the debt burden threatens health spending in developing countries.
What UNCTAD is asking for
The agency's recommendations run along two tracks. Internationally, UNCTAD calls for reversing declines in official development assistance, expanding lending by multilateral and regional development banks, and increasing technical support to strengthen national capacity.
At the country level, it urges stronger macroeconomic management, better public institutions, improved debt portfolio structures and wider use of innovative financial instruments.
Those proposals land ahead of a Borrowers' Platform meeting scheduled for October 12 in Bangkok, held alongside the IMF-World Bank Annual Meetings. The platform is designed as a dedicated space for developing countries to coordinate and amplify their position as borrowing costs rise.
"The platform offers borrower countries a dedicated space to work together and share knowledge towards finding a sustainable solution for the debt issues," Ambassador Alaa Hegazy of Egypt, Interim Chair of the Borrowers' Platform, said, according to Arise News.
Hegazy added that it is a cross-regional forum where countries confronting the same challenge of a growing debt burden can discuss these issues together.
The Borrowers' Platform holds its first Governing Council meeting on the sidelines of the IMF/World Bank Annual Meetings in Bangkok next week. The group has been gathering momentum ahead of that session.
What to watch: whether the Bangkok meeting produces concrete proposals on borrowing costs, and whether development banks and donor governments respond to UNCTAD's call to expand lending and halt the decline in official development assistance.
