Geneva, Switzerland, October 21, 2025: Developing nations are facing a combined public debt burden of approximately US$31 trillion, according to figures presented at a United Nations Conference on Trade and Development (UNCTAD) summit in Geneva. Officials said the scale of debt is constraining the ability of low- and middle-income countries to invest in trade, infrastructure, education, and climate resilience, further widening the global development gap.
UNCTAD reported that developing countries now account for more than 30 percent of the world’s public debt. Debt servicing costs among these nations surged to over US$920 billion in 2024, an increase of nearly 10 percent from the previous year. The organization warned that rising interest payments are placing severe pressure on national budgets and crowding out essential public spending. Among the countries facing the greatest debt-related fiscal challenges are Argentina, Pakistan, Zambia, Sri Lanka, and Ghana.
These five countries have experienced mounting external debt repayments, reduced access to affordable financing, and high exposure to global economic volatility. Argentina continues to grapple with a prolonged sovereign debt crisis, marked by high inflation and repeated negotiations with international creditors. Pakistan is managing significant external loan obligations amid currency depreciation and tight fiscal conditions. Zambia, which defaulted on its debt during the COVID-19 pandemic, is still engaged in complex restructuring efforts with bilateral and private creditors.
Argentina, Pakistan lead countries in debt distress
Sri Lanka defaulted on its foreign debt in 2022 and remains under an International Monetary Fund-supported program to stabilize its economy. Ghana entered debt restructuring negotiations in 2023 following a sharp rise in borrowing costs and fiscal deficits. UNCTAD stated that heavy debt servicing requirements in these and other developing countries have reduced fiscal flexibility at a time when investment is needed most to support economic recovery and competitiveness. The report noted that many developing nations are now allocating more to debt repayment than to health or education.
The trade summit highlighted that limited fiscal space and rising debt costs are undermining progress on development goals and hindering the integration of developing countries into the global trading system. Officials underscored the importance of coordinated international support to address these structural challenges. UNCTAD called for reforms in debt treatment mechanisms, increased transparency in sovereign lending, and enhanced cooperation between creditors and debtors.
UNCTAD urges multilateral action on global debt crisis
The agency also emphasized the need to scale up concessional finance for countries with limited access to capital markets. The conference concluded with broad support for multilateral institutions to play a greater role in facilitating debt sustainability and building economic resilience in developing nations. Delegates noted that the US$31 trillion figure reflects an urgent need for global action to ensure that public debt does not obstruct long-term development and trade integration. – By Content Syndication Services.