Overview:
Developing countries are facing growing financial pressure as rising borrowing costs eat into budgets for education, healthcare, infrastructure and climate action, according to a new UNCTAD report. The findings reveal that higher debt-servicing costs and reduced access to affordable financing are limiting development opportunities for billions of people worldwide, prompting calls for urgent reforms and stronger international support.
NEW YORK/GENEVA, 17 JUNE 2026 (UN NEWS CENTRE)—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 on Tuesday 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.
Here are some key findings:
*Developing countries received far less external finance than developed countries in 2024. External sources accounted for 11 percent of investment financing in developing economies, compared with 38 percent in developed economies
*External financial inflows to developing countries fell 18 percent between 2014 and 2024, while domestic financing rose 60 percent
*Africa received only 10 percent of total external inflows to developing countries, despite accounting for 22 percent of the developing world’s population while Asia and the Pacific attracted more than 70 percent
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….PACNEWS
