Access to finance is not enough: What the International Debt Report 2026 tells us

Developing economies need financing to build roads, power grids and schools, to create jobs, and to raise living standards. That is why access to capital has been a central goal of development finance for decades. But does access alone deliver these results? The newly launched International Debt Report (IDR) 2026, the World Bank Group's annual publication on external debt, puts this question front and center. Here is the paradox it reveals: access to international finance has improved, but the price of that finance has not. Low- and middle-income countries (LMICs) are borrowing more, paying more, and, in many cases, leaving less for long-term development. External debt in LMICs rose to a record $9.4 trillion, marking the strongest increase in five years. Growth was even faster in IDA-eligible and low-income countries. For several years, private lending to LMICs was either declining or barely growing. In 2025, that trend reversed. Private lenders returned, and bond markets reopened after years of tight financial conditions and investor caution. On the surface, these developments point to a recovery. But beneath the headline numbers, the picture is more complicated. Total debt service for LMICs rose for a fifth consecutive year in 2025, to $1.4 trillion, while payments to bondholders reached $363.1 billion. Between 2022 and 2025, LMICs paid about $436.1 billion more in principal and interest than they received in new financing. That means more public resources are being absorbed by debt servicing just when countries need to invest more in infrastructure, jobs, education, health, and the other foundations of long-term growth. The poorest countries are paying the most The return to international capital markets, while welcome, has been highly uneven. The poorest and most vulnerable countries now face borrowing costs not seen since the late 1980s. New private lending to IDA-eligible countries carry an average of 8.2 percent in 2025. The gap between what they pay private creditors and official creditors has widened from 3.4 percentage points a decade ago to 5.5 percentage points today, making private borrowing expensive. Bond market borrowing has continued into 2026 even as yields have risen. That raises a fair question: are the terms sustainable on all this new financing, and is the money reaching the people and places that need it most? A world full of shocks These questions matter even more in an economy prone to shocks. Over the past decade, countries have faced a pandemic, disrupted trade and supply chains, sharp jumps in food and energy prices, geopolitical fragmentation, and repeated bouts of financial market volatility. Any economy would struggle to absorb that, and it is harder still when governments already have large financing needs and little room to respond. Debt is not just a financial concern, either. When debt service squeezes productive and social spending, households feel it through weaker investment and fewer opportunities. The report finds that during external shocks, countries with heavier debt burdens tend to see larger adverse changes in the share of people who cannot afford a healthy diet. Sovereign borrowing costs and household welfare are closely connected. Why debt transparency matters Given all this, knowing how much countries owe, to whom, and on what terms has never been more important. For more than five decades, the World Bank has worked with borrowing countries to build the most comprehensive source of comparable external debt data for developing economies. But transparency can't rest on what borrowers report alone. Since the creditor data-sharing exercise began in 2022, successive rounds have helped reconcile loan-level records, identify discrepancies, validate information, and close critical data gaps, strengthening the quality and consistency of external debt statistics. Round after round, this has helped reconcile records, flag discrepancies, validate information, and close critical data gaps. That is debt transparency in practice. It is not just about publishing more data. It is about borrowers and creditors sitting down with their records, resolving differences, and steadily improving the shared information behind debt decisions. This work matters even more as sovereign financing gets more complex. New creditors, instruments, guarantees, restructurings, and financing arrangements make it harder to see a country's full obligations. Without reliable, reconciled data, governments can't manage debt well, creditors can't assess risk accurately, and restructurings get harder. Transparency is a shared responsibility. Borrowers need to keep comprehensive, timely debt records. Creditors, both official and private, need to disclose what is required to understand those obligations. And international institutions need to strengthen standards, close data gaps, and support better debt management systems. The bottom line Better information must lead to better financing. Countries with some of the greatest development needs still face some of the steepest borrowing costs, and borrowing that merely rolls over costly debt is no substitute for financing that expands productive capacity and raises future incomes. The goal shouldn't be more debt. It should be finance that is affordable, transparent, sustainable, and able to support investment and growth. That is the message of this year's report: access to finance is not enough. We have to know the debt, understand its terms, and make sure the financing developing countries receive helps them grow, withstand shocks, and improve people's lives. Access the full IDR 2025 and related International Debt Statistics database here.