Developing Countries Paid Record $921 Billion On Public Debt Interest in 2024

Chennai:  Developing countries accounted for nearly one third of the global public debt of $102 trillion in 2024 and India alone had over $3 trillion public debt. Developing countries paid a record $921 billion in interests, putting vital public services at risk and India paid 24.3 per cent of its net revenue on interest payment, finds the UN's trade and development body.

Global public debt rose to $102 trillion in 2024 and developing countries accounted for $31 trillion of this. They paid a record $921 billion in interests, straining budgets and putting vital public services at risk.

Since 2020, developing regions have been borrowing at rates two to four times higher than the United States. In 2024, developing nations paid $921 billion in net interest on public debt, up 10 per cent from the previous year.

A record 61 developing economies spent at least 10 per cent of their government revenues on interest payments, leaving less for critical areas like health, education and climate action.

India spent 24.3 per cent of its net revenue on interest payments in 2024 and 5.1 per cent of its GDP on interest payments. In comparison, India spent 1.3 per cent of GDP on health and 4.4 per cent on education. It had a public debt of around $3.2 trillion or 81.3 per cent of its GDP in 2024.

In 2023, developing countries paid $487 billion to lenders abroad. Half of these economies spent at least 6.5 per cent of their export earnings to repay external public debt.

In 2023, developing countries paid $25 billion more to creditors than they received in fresh debt disbursements, leading to an overall net debt outflow for years in a row.

“This negative trend is worsening as high interest rates, low global growth and rising uncertainty continue to strain public finances and make it harder to sustainably manage debt,” said UCTAD.

Today, 3.4 billion people live in countries that spend more on interest than on health or education.