More than half of the world's developing countries are grappling with liquidity and financing pressures severe enough to threaten basic public investment, according to discussions at the IMF and World Bank's annual meetings, as low-cost debt taken on during the pandemic comes due just as global borrowing costs have climbed.
The scale of the strain is stark. The average developing country now spends more than 10 percent of its revenue just servicing interest payments, nearly double the share from a decade ago. In ten countries, interest payments alone now exceed the entire public investment budget, leaving little room for spending on infrastructure, health or education even before other priorities are considered. Roughly 40 of the world's poorest countries are described as facing genuinely critical fiscal choices in the period ahead.
The human cost of the squeeze is already visible in growth figures. Sub-Saharan Africa saw real per capita income grow by about a fifth in the decade leading up to 2015; in the decade since, per capita incomes across the region have essentially stagnated. IMF Managing Director Kristalina Georgieva has pointed to refinancing constraints as a central driver, as countries that borrowed cheaply during the pandemic now face the task of rolling that debt over at far higher rates. Poor countries made record net repayments to the IMF in 2026, even as China, once a major net provider of development finance, has over the past decade shifted into what officials describe as a net extractor of resources from the developing world.