Soaring interest payments are squeezing budgets, forcing governments to choose between repaying creditors and funding essential services.
Developing countries are sinking deeper into a debt-driven development crisis. Their external debt – money owed to foreign creditors – has quadrupled in two decades to a record $11.4 trillion in 2023, equivalent to 99% of their export earnings.
A mix of factors has fuelled this surge, including increased borrowing for development projects, volatile commodity prices, and widening public deficits. The COVID-19 pandemic worsened the situation, as countries borrowed heavily to offset the economic fallout and…
