Episode 40 Can Countries Escape the Debt Trap? Lessons from the Latest Global Outlook

Can countries escape the debt trap? As global growth slows to 2.5% and government debt in developing economies has climbed from under 40% to over 70% of GDP since 2010, policymakers face increasingly difficult choices. This episode explores the findings of the latest Global Economic Prospects, June 2026 report, examining why borrowing becomes more expensive as debt rises, how commodity-dependent economies remain vulnerable to boom-and-bust cycles, and why strong institutions matter just as much as fiscal rules. Discover the practical lessons for building resilience, creating fiscal space, and supporting sustainable growth in an increasingly uncertain global economy.  Generated with AI using wondercraft.ai and guided by our experts. Read more at https://openknowledge.worldbank.org/entities/publication/b5f5a90f-3229-482f-b8c5-d3c4e9ecbad5