DFI says lower debt costs could free $900bn for poorer countries
Updated
Updated · The Guardian · May 6
DFI says lower debt costs could free $900bn for poorer countries
1 articles · Updated · The Guardian · May 6
A report launched in Oslo for UN chief António Guterres said G77 states spend $8tn yearly on debt service, averaging 35% of government spending.
Using IMF data, DFI estimated a broader package could free up $3tn annually, while a narrower plan excluding wealthier developing countries could release $917bn and more than double social spending.
The report says six billion people live where debt payments exceed health budgets, as campaigners urge debt relief before Britain chairs the G20 and warn private lending and the Iran war are worsening costs.
As China upends global finance, are Western-led debt relief efforts becoming obsolete?
Trillions are spent on debt while billions suffer. Is the global financial system fundamentally broken?
Can 'pause button' debt clauses for climate disasters finally break the cycle of crisis for vulnerable nations?
Unlocking $900 Billion Annually: Debt Relief as the Key to Ending the $8 Trillion Crisis in Developing Nations
Overview
The 2026 DFI report reveals that G77 countries spend $8 trillion annually on debt servicing, consuming 35% of their budgets and surpassing health expenditures, affecting six billion people. Ongoing Middle East conflicts have disrupted oil supplies, pushing prices above $100 a barrel, fueling global inflation and forcing central banks to raise interest rates. This increases borrowing costs for developing countries, intensifying their debt burden. Implementing debt relief by halving borrowing costs for the most affected and capping repayments could unlock up to $3 trillion annually, potentially doubling social spending. The UK’s 2027 G20 presidency offers a critical chance to legislate private creditor participation and push reforms to address this crisis.