Rising debt costs squeeze development funding: New UN report

GENEVA, (UrduPoint / Pakistan Point News / WAM - 17th Jun, 2026) Rising borrowing costs are leaving many developing countries with less money to invest in schools, healthcare, infrastructure and climate action, according to a new report released by the UN trade agency, UNCTAD.

Between 2018 and 2024, 99 developing countries, which are home to 5.5 billion people, saw rising interest payments reduce the fiscal space available for development, the new report found.

The report shows how rising external borrowing costs, shorter repayment periods and persistent risk premiums are putting growing pressure on public finances.

Developing countries received far less external finance than developed countries in 2024.

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External sources accounted for 11% of investment financing in developing economies, compared with 38% in developed economies

External financial inflows to developing countries fell 18% between 2014 and 2024, while domestic financing rose 60%

Africa received only 10% of total external inflows to developing countries, despite accounting for 22% of the developing world’s population while Asia and the Pacific attracted more than 70%

At a time when developing countries continue to pay significantly more for external financing than developed economies, UNCTAD called for national reforms and stronger international action to reduce financing costs and expand the scale of and access to affordable, long-term finance.