The government raised more than Rs 366 billion in public debt while spending over Rs 250 billion on debt servicing in the first nine months of the current fiscal year 2024/25, according to the Public Debt Management Office (PDMO).
Nepal's total public debt stood at Rs 2.434 trillion at the start of the fiscal year in mid-July 2024. By mid-April 2025, that figure had risen by Rs 233.17 billion, pushing the outstanding debt to Rs 2.667 trillion—equivalent to 46.75% of the country’s Gross Domestic Product (GDP).
External debt amounts to Rs 1.365 trillion, or 51.19% of the total.
The government has set a target to raise Rs 547 billion in public debt this fiscal year to meet its expenditure needs.
At the end of the third quarter, the government had raised Rs 291.14 billion in domestic debt and Rs 74.95 billion in external debt, achieving 88.22% and 34.54% of the respective annual borrowing targets.
Meanwhile, Rs 252.48 billion has been spent on debt servicing—62.67% of the Rs 402.85 billion allocated for the fiscal year. Of that, Rs 212.93 billion was used to service domestic debt, including Rs 170.09 billion in principal payments and Rs 42.84 billion in interest. External debt servicing cost Rs 39.43 billion, with Rs 32.93 billion paid toward principal and Rs 6.61 billion in interest.
Exchange rate fluctuations have also increased Nepal’s debt burden. According to the PDMO, changes in foreign exchange rates led to an additional Rs 70.09 billion in external debt obligations during the nine-month period.
Nepal’s external borrowing is conducted under the Special Drawing Rights (SDR) system, which comprises five global currencies: the US Dollar, Euro, British Pound Sterling, Chinese Yuan, and Japanese Yen. The depreciation of the Nepali rupee against these currencies has further intensified pressure on the country’s external debt servicing.
(With inputs from RSS)
