Comparative Analysis of Government Debt Management Strategies in High- and Low-Income Countries

Abstract

Governments are refinancing large post-pandemic debt stocks into a higher-rate environment. Across the OECD, the interest-payments-to-GDP ratio rose from ~3.0% (2023) to ~3.3% (2024), and refinancing needs are projected at about USD 13 trillion in 2025 (≈80% of gross borrowing), reflecting heavier reliance on bills and the retreat of central-bank demand. Developing economies face tighter external finance: in 2023, they paid a record USD 1.4 trillion to service foreign debt, including USD 406 billion in interest, while about 3.4 billion people live in countries spending more on interest than on health or education. These conditions amplify rollover, FX, and market-functioning risks, with sharper constraints in low-income settings.