Public debt hits Rs. 2,859B, up Rs. 185B in 7 months

By A Staff Reporter,Kathmandu, Feb. 27: The total outstanding debt of the government reached Rs. 2,858.97 billion as of mid-February, 2026 of the current fiscal year 2025/26.

According to the latest report of the Public Debt Management Officer under the Ministry of Finance, the public debt of the government stood at Rs. 2858.97 billion, up from Rs. 2,674.04 at the beginning of the current fiscal year.

Out of total debt, external debt comprises Rs. 1,509.84 billion and domestic debt comprises Rs. 1,349.13 billion.

This indicates a net increase of over Rs. 184.93 billion within the first seven months of the fiscal year.

Out of additional public debt, Rs. 80.91 billion has been added under the domestic public debt and Rs. 104.02 billion under the external front.

Share of external public debt to the total outstanding debts is 52.81 per cent while the share of domestic debts is 47.19 per cent.

External debt continues to make up a slightly larger share of Nepal’s total liabilities.

The total debt to GDP ratio is 46.81 per cent as of mid-February 2026. The external debt to GDP ratio is 24.72 per cent and domestic debt to GDP ratio is 22.09 per cent.

The steady increase in both domestic and external borrowing suggests continued fiscal pressure.

With revenue growth remaining moderate and capital expenditure needs high, the government appears reliant on debt financing to bridge the budget deficit.

According to statistics from the Public Debt Management Office, the country incurred an additional loan burden of Rs. 92.96 billion during the period due to the depreciation of the Nepali currency against the US dollar.

The Nepal Rastra Bank (NRB) fixed the exchange rate of one US dollar at Rs. 145.82 on Thursday.

Rs. 203.65 billion spent on debt servicing

The government has spent about Rs. 203.65 billion for the payment of principal and interest during the first seven months of the current fiscal year.

The data also shows that the government has paid only Rs. 163.52 billion as principal payments and Rs. 40.13 billion as interest of such loans.

The government has paid Rs. 136.76 billion for principal payment and Rs. 33.85 billion for interest of domestic loans.

Likewise, the government has paid Rs. 26.76 billion for principal payment and Rs. 6.28 billion for interest of external debt.

The government has spent 49.55 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 the financial management for the current fiscal year.

The debt service to GDP stood at 3.33 per cent during the first seven months of the current fiscal year.

Debt mobilisation stands at almost 43% of annual target

The government has mobilised an additional loan of Rs. 255.48 billion during the first seven 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. 217.66 billion under the domestic debt and Rs. 37.81 billion under the external debt.

The data show significant progress in domestic debt mobilisation. In contrast, external debt mobilisation has remained relatively low.

The government has set a target of collecting an additional Rs. 595.66 billion of 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.

According to the report, this debt mobilisation during the review period is 42.89 per cent of the annual target.

Of this, domestic debt accounts 60.13 per cent and external debt 16.18 per cent of their respective annual targets.