Nepal’s Outstanding Public Debt Exceeds Rs 2,800 Billion

Nepal’s outstanding public debt has crossed Rs 2,800 billion, according to government data.

At the beginning of the current fiscal year 2025/26 (mid-July 2025), the country’s total public debt stood at Rs 2,674.04 billion. By mid-January 2026, the debt had increased by Rs 132.34 billion, reaching Rs 2,806.39 billion.

The total outstanding public debt currently stands at 45.95 percent of the gross domestic product (GDP).

According to the Public Debt Management Office, external debt accounts for 53 percent of the total public debt, amounting to Rs 1,487.26 billion, while internal debt makes up the remaining 47 percent, or Rs 1,319.13 billion. Based on GDP, internal debt accounts for 21.60 percent, while external debt stands at 24.35 percent.

For the current fiscal year, the government has set a target of raising Rs 595 billion in public debt. By the mid-term review period, it had raised Rs 214.55 billion, which represents 36.02 percent of the annual target.

In the past six months, internal borrowing accounted for 82.81 percent of the total debt raised, while external borrowing made up 17.19 percent, the office said. Of the Rs 362 billion internal borrowing target for the fiscal year, the government has raised Rs 177.67 billion by mid-January. Similarly, against an external borrowing target of Rs 233.66 billion, only Rs 36.89 billion has been raised during the review period.

Debt servicing has also placed a significant burden on public finances. For the current fiscal year, the government allocated Rs 411.01 billion for principal and interest payments. By mid-January, it had already paid Rs 187.12 billion. Of this amount, Rs 155.01 billion was spent on servicing internal debt, while Rs 31.99 billion went toward external debt payments.

During the past six months alone, the government spent Rs 152.89 billion on principal repayments and Rs 34.23 billion on interest payments for both internal and external debts. Total debt servicing costs stood at 3.06 percent of the GDP as of mid-January.