ISTANBUL – Developing countries spent $1.4 trillion on foreign debt in 2023, with their interest payments reaching a 20-year high, according to a report from the World Bank released on Tuesday.
Interest costs surged nearly 30%, climbing to $406 billion, which has strained national budgets, particularly in sectors like healthcare, education, and environmental protection.
The pandemic significantly increased the debt burdens of developing nations, and the subsequent rise in global interest rates has made recovery more difficult. The World Bank noted that borrowing costs from international creditors have surged, with interest rates on loans from official lenders more than doubling to over 4%.
The financial pressure has been most intense for the world’s poorest countries, particularly those eligible for support from the World Bank’s International Development Association (IDA). These nations paid a record $96.2 billion in debt servicing in 2023, marking a challenging year for their economies.
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