Global public debt hit a record $102 trillion in 2024 striking developing countries hardest UN Trade and Development
Since 2010, developing countries’ debt has grown twice as fast as that of advanced economies. Today, 3.4 billion people live in countries spending more on interest payments than on health or education.
Global public debt reached an all-time high of $102 trillion in 2024, up from $97 trillion in 2023, according to “A World of Debt 2025″, published by UN Trade and Development (UNCTAD).
The report released ahead of the 4th International Conference on Financing for Development find that Global public debt continues to increase rapidly, driven by cascading crises as well as the sluggish and uneven performance of the global economy.
In 2024, public debt, comprising domestic and external general government debt, reached US$102 trillion, an increase of US$5 trillion from 2023.
Speaking at the 4th International Conference on Financing for Development on Monday, the Deputy Managing Director of the International Monetary Fund (IMF), Nigel Clarke outlined the need to address debt vulnerabilities as one of the priorities.
“The risk of systemic debt crisis seems broadly contained for now. But many countries continue to struggle with high interest rates and refinancing needs that constrain their ability to finance their critical development spending and build resilience,” he said
“There is still much more work to do. The IMF is doing its part in supporting developing countries. Through our tailored policy advice, we help out member countries make their economies more vibrant and more resilient. We will continue to strengthen our analysis,” he promised.
Uganda is among the countries that are currently trapped in the high debt repayment crisis. The high interest payments and commitment fees required to sustain this debt have increased.
The Ministry of Finance plans to spend an estimated 15.7% of the revenue generated on interest repayment for financial year 2025/2026.
Julius Mukunda, the Coordinator at Civil Society Coalition on Budget Advocacy (CSBAG) says over the last 11 years, the government has borrowed funds worth 11.86 billion dollars for investments, of which $608.43 was earmarked for ago-industrialization. Some of the money borrowed has not been utilized but the government continues to pay high interest in servicing them.
The Fourth International Conference on Financing for Development (FFD4) provides a unique opportunity to reform financing at all levels, including to support reform of the international financial architecture and addressing financing challenges preventing the urgently needed investment push for the SDGs.
The FFD4 provides space where leaders from all governments, along with international and regional organizations, financial and trade institutions, businesses, civil society and the UN System unite at the highest levels, fostering stronger international cooperation.
LI Junhua, Under-Secretary-General for Economic and Social Affairs and Secretary-General of the Conference said this week marks a key moment in the effort to ensure that every country, not just a prerogative of a few can mobilise resources necessary to build a just, inclusive and sustainable future.
He suggested the need to mobilise finance at scale and the need to reform the global finance architecture.
“We need to reform the international financing architecture and to put the people needs at the center of development,” said LI Junhua, also the secretary General of the conference. Developing countries including Uganda have been urging for a reform at the World Bank and IMF lending policies especially in relation interest rates.
The UN Trade and Development (UNCTAD) is calling for a new global deal that e that ends the debt trap, unlocks long-term finance, redefines prosperity beyond GDP, and makes trade work for inclusive growth.
In 2024, public debt in developing countries reached US$31 trillion, accounting for 31% of the global total. This represents a substantial increase from their 16% share in 2010.
At the same time, this figure reveals the persistent asymmetries in global financial markets: although developing countries account for 39% of global GDP 1, they are home to 83% of the world’s population and face substantial SDG financing gaps. There are stark disparities among developing regions, as well as across countries.
Over 24% of global public debt—equivalent to three-quarters of the total debt of developing countries—is owed by countries in Asia Public debt can be a powerful tool for development.
Governments use it to invest in their people and economies – and pave the way to a better future. But when debt grows too large or becomes too costly, it turns into a burden. That is the current reality for much of the developing world.
Today, a total of 3.4 billion people now live in countries that spend more on debt interest than on either health or education. Sharpest edge hits developing countries Developing countries are shouldering the heaviest costs.
Their public debt has grown twice as fast as that of advanced economies since 2010, reaching $31 trillion. More importantly, debt costs remain disproportionately high, crowding out resources for much-needed development spending.
In 2024 alone, they spent $921 billion on interest payments – a 10% increase compared to 2023. A total of 61 countries allocated more than 10% of their government revenues to debt interest in 2024. High borrowing costs block development.
Since 2020, developing countries have been borrowing at average rates two to four times higher than those for the United States, making it harder to invest in sustainable development.
High interest rates, weak global growth and rising uncertainty are squeezing public budgets.
The consequences are direct and devastating, as people – especially vulnerable populations – pay the price. Reform is urgent Developing countries must not be forced to choose between servicing their debt or serving their people.
UNCTAD is suggesting what it called a pressing need to reform the international financial architecture. Some of the suggested steps include, the making the system more inclusive and development-oriented, enhancing the availability of liquidity in times of crisis, creating an effective debt workout mechanism that addresses current deficiencies and providing more and better concessional finance and technical assistance to support countries in tackling the high cost of debt.
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