Developing countries are facing a mounting debt crisis, with debt service payments exceeding new financing for the third consecutive year, reaching a 50-year high between 2022 and 2024.

This alarming trend is highlighted in the World Bank’s 2025 Year in Review, released today.

Despite these significant challenges, the global economy has demonstrated unexpected resilience, particularly in developing nations. The World Bank noted that global growth has surpassed earlier projections, aided by the reopening of bond markets and a gradual easing of interest rates.

Decreasing uncertainty surrounding trade policies and stable energy markets have also contributed to this positive outlook. “Forecasters now anticipate growth of about 2.7 % for this year—generally in line with expectations at the start of 2025. This resilience was fueled by rapid adaptation, including the shifting of supply chains, fast adoption of digital technologies like artificial intelligence (AI), and diversified markets,” the report indicated.

The World Bank Group has prioritized job creation as a key strategy for fostering progress, opportunity, and resilience in these countries. “This was our year of job creation, as we placed it at the center of our development efforts. Jobs are not only the surest path out of poverty, but also provide dignity, hope, and stability. They build self-sufficient economies, reduce humanitarian need, and drive demand for goods, helping ensure that development is both sustainable and thriving,” a World Bank official stated.

However, the Bank also expressed concerns about significant demographic shifts occurring in developing countries. Over the next decade, an estimated 1.2 billion young people will enter the workforce, potentially shaping the global economy for generations to come.

“Ensuring there are enough jobs for them is critical: this demographic dividend could catalyze the global economy. But a lack of opportunities could fuel instability, unrest, and mass migration, with implications for every region and economy,” the World Bank warned.

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