## Debt Vulnerabilities in Low-Income Countries Recent Developments and Trends

_Policy Papers, October 31, 2025_

## Source details

**Canonical URL:** [Debt Vulnerabilities in Low-Income Countries Recent Developments and Trends](https://www.imf.org/en/publications/policy-papers/issues/2025/10/31/debt-vulnerabilities-in-low-income-countries-recent-developments-and-trends-571487)

## Other formats

- [Markdown version](/en/publications/policy-papers/issues/2025/10/31/debt-vulnerabilities-in-low-income-countries-recent-developments-and-trends-571487/index.md)
- [Structured JSON version](/en/publications/policy-papers/issues/2025/10/31/debt-vulnerabilities-in-low-income-countries-recent-developments-and-trends-571487/index.json)
- [Bundle manifest](/en/publications/policy-papers/issues/2025/10/31/debt-vulnerabilities-in-low-income-countries-recent-developments-and-trends-571487/bundle-manifest.json)

## Bibliographic details
- Published: October 31, 2025
- Series: Policy Papers
- DOI: https://doi.org/10.5089/9798229029261.007

---

### Overview
- Purpose: Provide factual data and insights on recent trends in public debt vulnerabilities and financing challenges in Low-Income Countries (LICs), with a special focus on domestic debt issues.
- Context: Despite efforts to unwind the impact of the COVID-19 fiscal stimulus and other shocks, debt levels in many LICs remain relatively high, and vulnerabilities are exacerbated by uncertain global conditions and a changing creditor landscape.
- Emphasis: Evidence highlights the ever more important role of domestic debt as a source of public financing and the continued need for IMF and World Bank monitoring and support.

### Key findings and observations
- Debt levels in many LICs remain relatively high following the COVID-19 fiscal stimulus and other shocks.
- Debt vulnerabilities are being exacerbated by:
  - uncertain global conditions, and
  - a changing creditor landscape.
- Domestic debt is increasingly important as a source of public financing in LICs.
- The scale of identified vulnerabilities reinforces the need for:
  - strong debt management, and
  - enhanced debt transparency.
- The IMF and the World Bank play a continued role in monitoring debt vulnerabilities and supporting countries through:
  - policy advice,
  - financial resources, and
  - capacity building.

### Policy implications and recommendations
- Strengthen debt management frameworks in LICs to sustain good relations with creditors and underpin sound financing decisions.
- Enhance debt transparency to improve creditor relations and financing outcomes.
- Continue and expand IMF and World Bank engagement focused on:
  - monitoring debt vulnerabilities,
  - providing policy advice,
  - offering financial resources, and
  - delivering capacity building tailored to domestic debt management challenges.

### Subject coverage and keywords
- Subject areas: Debt service, Debt sustainability, Domestic debt, External debt, Public debt.
- Keywords: Asia and Pacific, Caribbean, Central America, Debt burden, Debt burden indicator, Debt service, Debt sustainability, Debt transparency, Debt vulnerability, Domestic debt, Financing needs, Global, IMF policy, IMF staff, IMF-World Bank LIC-DSF, IMF-World Bank LIC-DSF database, South America, Sub-Saharan Africa, transparency policy.

---

## Content in this bundle

- **Policy Paper**
  - [Policy Paper (Markdown version)](/-/media/files/publications/pp/2025/english/ppea2025038.pdf.md){rel="alternate" type="text/markdown"}
  - [Policy Paper (PDF)](/-/media/files/publications/pp/2025/english/ppea2025038.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/policy-papers/issues/2025/10/31/debt-vulnerabilities-in-low-income-countries-recent-developments-and-trends-571487_