KATHMANDU: Nepal’s total public debt has climbed to nearly Rs 3 trillion, reaching Rs 2.97 trillion by the end of the last fiscal year 2025/26, according to the latest monthly report released by the Public Debt Management Office.
The report shows that the country’s total public debt stood at Rs 2.67 trillion at the beginning of the fiscal year. Over the course of the year, the debt increased by around Rs 300.85 billion, including losses resulting from exchange rate fluctuations.
The total public debt now amounts to 45.07 percent of Nepal’s Gross Domestic Product (GDP).
Of the total debt, 53.77 percent is external debt, while 46.23 percent is domestic debt. By the end of the fiscal year, external debt had reached Rs 1.60 trillion, while domestic debt stood at Rs 1.38 trillion.
The government had set a target of mobilizing Rs 595.66 billion in public borrowing during the fiscal year. However, it secured only Rs 447.18 billion, achieving 75.07 percent of the annual target.
Domestic borrowing accounted for Rs 358.66 billion, or 80.21 percent of the total debt raised, while external borrowing stood at Rs 88.50 billion, or 19.79 percent. Domestic borrowing reached 99.08 percent of its target, whereas external borrowing achieved only 37.88 percent of the planned amount.
The report also shows that the government spent a substantial amount on debt servicing. Of the Rs 411.01 billion allocated for debt repayment during the fiscal year, Rs 386.22 billion was spent, representing 93.97 percent of the allocated budget.
Domestic debt servicing totaled Rs 311.93 billion, including Rs 250.56 billion in principal repayments and Rs 61.37 billion in interest payments.
Similarly, external debt servicing amounted to Rs 74.28 billion, comprising Rs 61.84 billion in principal repayments and Rs 12.44 billion in interest.
Overall, the government paid Rs 312.40 billion in principal and Rs 73.82 billion in interest during the fiscal year. Total debt servicing expenditure accounted for 5.85 percent of GDP, the report states.
The office also noted that fluctuations in foreign exchange rates significantly increased Nepal’s debt burden. According to the report, exchange rate losses raised the public debt stock by 6.24 percent during the fiscal year and accounted for 55.51 percent of the total increase in public debt.
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