Public debt rises to Rs. 2,806 billion

By A Staff Reporter,Kathmandu, Jan. 28: Nepal's total outstanding public debt reached Rs. 2,806.39 billion as of mid-January 2026, reflecting a significant increase from the previous fiscal year.

Out of total debt, external debt amounts to Rs. 1,487.26 billion and domestic debt comprises Rs. 1,319.13 billion, according to the report of Public Debt Management Office under the Ministry of Finance. 

During the first half of the current fiscal year 2025/26, the total outstanding debt has increased by 5 per cent consisting of an increase in external debt and internal debt by 5.79 per cent and 4.01 per cent respectively.  

The public debt was Rs. 2,674.04 billion in the beginning of the current fiscal year. 

External public debt represents more than half of total outstanding public debt as of mid-January of the current fiscal year. 

Share of external public debt to the total outstanding debts is 53 per cent while the share of domestic debts is 47 per cent. Around Rs. 132.35 billion public debt has been added in the first six months of the current fiscal year.  

Out of additional public debt, Rs. 50.91 billion has been added under the domestic public debt and Rs. 81.44 billion under the external public debt. The total debt to GDP ratio is 45.95 per cent as of mid-January 2026. The external debt to GDP ratio is 24.35 per cent and domestic debt to GDP ratio is 21.60 per cent.

According to the statistics Public Debt Management Office, the country faced an additional loan burden of Rs. 70.68 billion till the period due to dipping value of Nepali currency against UD dollar. 

About Rs. 214.55 billion public debt mobilised

The government has mobilised an additional loan of Rs. 214.55 billion during the first six months of the current fiscal year out of the annual target of Rs. 595.66 billion. 

Out of additional public debt, the government has mobilised a loan of Rs. 177.66 billion under the domestic debt and Rs. 36.89 billion under the external debt.

The government has set a target of collecting an additional Rs. 595.66 billion loan to meet the budget deficit for the last fiscal year. 

Out of this, Rs. 362 billion is aimed to be collected through domestic borrowing and Rs. 233.66 billion through external loans.  

The total public debt raised so far is 36.02 per cent of the annual target.

The government was able to mobilise about 49.08 per cent of the annual domestic debt mobilisation target while only 15.79 per cent of external debt mobilisation target was achieved during the review period.

The government has spent about Rs. 187.12 billion for the payment of principal and interest payment during the first six months of the current fiscal year. 

The data also shows that the government has paid only Rs. 152.89 billion as principal payments and Rs. 34.23 billion as interest of such loans.  The government has paid Rs. 126.76 billion for principal payment and Rs. 28.37 billion for interest of domestic loans. 

Likewise, the government has paid Rs. 26.13 billion for principal payment and Rs. 5.85 billion for interest of external debt.

The government has spent 31.54 per cent of the total budget allocation for principal and interest payment during the review period of the current fiscal year.

The government has allocated budget of Rs. 411.01 billion for financial management in the current fiscal year.