Global Debt Crisis 2025

The global debt crisis is one of the most pressing economic challenges of the 21st century, affecting both developed and developing countries. To address this growing concern, the Sevilla Forum 2025 was launched on 22 October 2025 during the 16th UN Conference on Trade and Development (UNCTAD16) in Geneva.

Led by Spain and supported by UNCTAD and the UN Department of Economic and Social Affairs (DESA), the Forum aims to promote open dialogue and concrete actions on sovereign debt and debt reform.

This initiative represents a significant outcome of the Fourth International Conference on Financing for Development (FfD4) and is part of the broader Sevilla Platform for Action, complementing the Sevilla Commitment to improve debt sustainability and development financing. 

Rising Global Debt: A Growing Concern

According to UNCTAD, global public debt reached a staggering $102 trillion in 2024, with developing countries owing $31 trillion. These countries also paid $921 billion in interest, contributing to a widening global debt problem. Around 3.4 billion people live in nations where governments spend more on debt servicing than on essential services such as health and education.

The debt crisis in developing countries highlights the urgent need for international debt reform and stronger financial stability measures.

The rising public debt and increasing sovereign debt defaults have created serious global economic challenges, making platforms like the Sevilla Forum 2025 vital for discussion and action.

Purpose and Objectives of Sevilla Forum 2025

The Sevilla Forum 2025 serves as a permanent platform to strengthen cooperation between borrowers and creditors.

Its key objectives include:

• Promoting responsible lending and borrowing in global finance.

• Advancing reforms in the global debt architecture.

• Operationalising the Sevilla Commitment through practical debt sustainability frameworks.

• Ensuring transparency, fairness, and predictability in international finance.

UN Secretary-General António Guterres emphasised that the Forum would sustain attention on the “Sevilla agreements” and provide solutions to the 2025 global debt crisis.

UNCTAD Secretary-General Rebeca Grynspan called it a breakthrough for developing economies, offering new pathways for debt restructuring and fostering international cooperation for debt restructuring.

Spain’s Hosting Role and Initiatives

Spain not only hosts but also finances the Sevilla Forum 2025. Minister of Economy Carlos Cuerpo described it as “a bridge between borrowers and creditors” to track the implementation of global debt initiatives.

Spain’s recent initiatives include:

• Debt Pause Clause Alliance: Promotes temporary suspension of debt payments for countries in crisis.

• Global Hub for Debt Swaps: Supports environment-linked debt relief programs.

These initiatives reinforce Spain’s role in tackling the global debt crisis and demonstrate leadership in international debt relief efforts. The Sevilla Forum 2025 acts as a global hub for monitoring such reforms and ensuring their implementation.

Framework for Global Financial Reform

The Sevilla Forum 2025 enables regular dialogue among governments, creditors, and experts to ensure financial stability and prevent sovereign debt defaults. UN DESA’s Li Junhua highlighted that the Forum will turn political consensus into coordinated global action.

By fostering global financial governance, improving debt sustainability frameworks, and promoting responsible lending, the Sevilla Forum 2025 also contributes to the UN Sustainable Development Goals (SDGs).

It addresses the causes and impacts of the global debt crisis, including rising public debt, economic crises in developing nations, and inequitable access to international finance.

Exam-Oriented Facts for SSC Aspirants

• Launch Date: 22 October 2025 at UNCTAD16, Geneva.

• Led by Spain, supported by UNCTAD and UN DESA.

• Part of: Sevilla Platform for Action and Sevilla Commitment.

• Global Public Debt (2024): $102 trillion; developing countries owe $31 trillion.

• Impact: 3.4 billion people live in nations spending more on debt than on social services.

• Key Initiatives: Debt Pause Clause Alliance, Global Hub for Debt Swaps.

• Platform: Sevilla Forum 2025 facilitates dialogue for debt reform and international debt relief.

Final Thoughts

The Sevilla Forum 2025 was launched on 22 October 2025 at UNCTAD16 in Geneva to address the growing global debt crisis. Led by Spain and supported by UNCTAD and UN DESA, the Forum provides a permanent platform for dialogue between borrowers and creditors, promoting sovereign debt reform and responsible lending and borrowing.

With global public debt reaching $102 trillion in 2024, and developing countries owing $31 trillion, the Forum aims to strengthen financial stability, implement the Sevilla Commitment, and advance debt restructuring initiatives. Spain’s programmes, including the Debt Pause Clause Alliance and Global Hub for Debt Swaps, highlight its leadership in international debt relief.

The Forum fosters transparency, fairness, and solutions to the 2025 global debt crisis, supporting sustainable development worldwide.