Developing countries paid more in debt service than they received in new financing for the third year in a row, according to the 2025 Year in Review published by the World Bank. The report reveals that between 2022 and 2024, net debt outflows from developing economies reached their highest level in five decades, underscoring the growing financial strain on poorer countries as global borrowing costs remained elevated.
Debt service payments, which include both interest and principal repayments, have continued to rise at a time when access to affordable new loans has become more limited. As a result, many developing nations are sending more money to external creditors than they are receiving to support economic growth, infrastructure, and social development.
Despite these pressures, the World Bank noted that the global economy performed better than many analysts had predicted, particularly in developing regions. Global growth exceeded earlier forecasts even amid persistent trade tensions and tariff measures. Conditions improved somewhat as international bond markets gradually reopened and interest rates began to ease, offering modest relief to heavily indebted countries. The report also pointed to declining trade-policy uncertainty and relatively stable energy markets as factors that helped support economic activity.
Looking ahead, the World Bank said forecasters now expect global economic growth of about 2.7 percent in 2025, broadly in line with projections made at the start of the year. This resilience, the institution said, was driven by the ability of economies to adapt quickly, including shifts in global supply chains, expanded market diversification, and the rapid adoption of digital technologies such as artificial intelligence.
Against this economic backdrop, the World Bank Group said it placed job creation at the centre of its development agenda in 2025, describing employment as the most effective pathway out of poverty and a foundation for social stability. The institution stressed that jobs provide dignity, opportunity, and economic security, while strengthening self-sufficient economies, reducing humanitarian needs, and driving demand for goods and services needed for sustainable growth.
The report also raised concerns about major demographic changes unfolding across the developing world. Over the next decade, an estimated 1.2 billion young people in developing countries will reach working age, a shift that the World Bank said will significantly shape global economic and social outcomes. If sufficient employment opportunities are created, this demographic expansion could generate a powerful boost to the global economy. However, the institution warned that failure to create enough jobs could fuel instability, social unrest, and increased migration, with consequences for countries and regions worldwide.
Overall, the World Bank’s assessment highlights a mixed global picture in which economic resilience has coexisted with deepening debt pressures for developing economies, reinforcing the urgency of policies that address debt sustainability while expanding employment and growth opportunities.
