Developing nations are forecasted to owe a record $22 billion in debt repayments this year, predominantly linked to China's Belt and Road Initiative (BRI) loans. This trend is exacerbated by a drying up of new lending, with 2025 projected to see a staggering $35 billion in repayments to China alone. The situation poses significant risks to essential public services such as health and education, particularly for the world's poorest countries. Experts warn that the shift from being borrowers to debt collectors highlights the strain on developing economies amid rising interest costs and external financial pressures.
According to the Lowy report, however, paying off these debts is now jeopardising public spending. Pressure from Chinese state lending, along with surging repayments to a range of international private creditors, is putting enormous financial strain on developing economies.
In 2025, debt repayments owed to China by developing countries will amount to $35bn. Of that, $22bn is set to be paid by 75 of the world's poorest countries, putting health and education spending at risk.
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