For much of the past decade, developing countries have been paying more and more to borrow, leaving less money for schools, hospitals, climate action and other critical public investments.
The consequences are now visible in public finances: higher interest bills mean governments have less resources for other priorities.
According to calculations by UN Trade and Development (UNCTAD), rising interest payments reduced the share of government revenue available for other public spending in 99 developing countries – 73% of the total – between 2018 and 2024.
As debt servicing absorbs a growing share of revenues, investment in development priorities is being squeezed.
Shift to private credit left developing countries more exposed
In…