In December 2024, the World Bank warned that developing countries spent a “record $1.4 trillion to service their foreign debts in 2023”, as interest rates rose to a 20-year high. It said this “squeezed the budgets of many countries in critical areas such as health, education and the environment”. The World Bank reports that 38 low-income countries are in debt distress, or at high risk of being so. These are mostly in Africa and Asia. Debt distress means they cannot meet their financial obligations or are already restructuring their debts. This Commons Library briefing describes the current level of indebtedness in countries with low or middle incomes, UK policy on debt relief, the increasing role of China and private creditors, and schemes to address debt distress, including by the G20 and ‘debt for environment swaps’. […]