Developing economies are facing mounting financial challenges as rising debt-servicing costs, geopolitical instability and higher prices threaten government budgets and long-term development plans.
During the annual meetings of the International Monetary Fund and the World Bank in Bangkok, G24 chair Taiwo Oyedele, Nigeria's finance minister, highlighted the growing burden of debt repayments on developing countries. Reuters reported on October 13 that these countries were paying approximately $500 billion more in debt-servicing costs than developed economies.
The financial pressure comes at a time when governments are also dealing with higher energy costs, food-price uncertainty and the economic consequences of conflict in the Middle East. These overlapping challenges can make it harder for countries to maintain public services while meeting obligations to international creditors.
When debt payments absorb a growing share of government revenue, fewer resources may be available for schools, hospitals, transport networks and programmes designed to reduce poverty. Countries may also find it more expensive to borrow additional money because investors demand higher returns to compensate for economic and political risks.
The G24 has called for more accessible and concessional financing from international institutions. Such funding can offer more favourable terms than commercial borrowing and help governments manage immediate pressures without undermining longer-term development priorities.
Another concern is the unequal distribution of benefits from technological change. While investment in artificial intelligence is supporting activity in some advanced economies, countries with limited electricity supplies, digital infrastructure and computing capacity risk falling further behind.
International financial institutions therefore face pressure to balance financial stability with the need for sustainable economic growth.
The issue is particularly important for countries seeking to expand employment opportunities for young populations while improving infrastructure and resilience to climate-related shocks.
The discussions in Bangkok could influence future lending priorities, debt-restructuring initiatives and development-finance programmes. However, meaningful progress will depend on cooperation among borrowing governments, creditors and multilateral institutions.
For many developing countries, the central challenge is ensuring that debt obligations do not prevent essential investment in economic opportunity and public welfare.
