World Bank says global debt interest payments hit record US$4.15 trln in 2024

Global interest payments on debt reached a record US$4.15 trillion (HK$32.37 trillion) in 2024 despite a downward trend in worldwide interest rates, the World Bank said in its International Debt Report on Thursday.

The report highlighted a US$741 billion gap between debt service costs and new financing for developing countries from 2022 to 2024, the widest in over 50 years.

The bank urged nations to use the current relatively accommodative financing environment to improve their fiscal health.

It warned that debt continues to rise in developing countries, with emerging economies increasingly turning to domestic debt markets for funding. Last year, 50 countries saw their domestic debt grow faster than external debt, a trend that could crowd out bank lending to the private sector and raise refinancing costs due to shorter maturities.

Additionally, the report noted that net flows from bilateral lending plummeted 76 percent to US$4.5 billion, the lowest level since the 2008 financial crisis, forcing countries to seek more expensive private financing.