The Government of Nepal raised over Rs 366 billion in public debt during the first nine months of the current fiscal year (FY) 2024/25, while spending more than Rs 250 billion on loan repayments, including both principal and interest.
According to the Public Debt Management Office (PDMO), Nepal’s total public debt reached Rs 2.67 trillion by the end of Chaitra (mid-April). This marks an increase of Rs 233.17 billion from the start of the fiscal year, when the debt stood at Rs 2.43 trillion.
As of mid-April, public debt amounts to 46.75 percent of the country’s Gross Domestic Product (GDP). External debt accounts for 51.19 percent of the total public debt, while domestic debt makes up the remaining 48.81 percent.
Of the total debt stock, domestic liabilities stand at Rs 1.30 trillion, and external liabilities at Rs 1.36 trillion.
The government had set a target to raise Rs 550 billion in public debt for the entire fiscal year. By the third quarter’s end, it had met 66.93 percent of this goal, securing Rs 366.09 billion—Rs 291.14 billion from domestic sources and Rs 74.95 billion from external lenders. This represents 88.22 percent of the annual domestic borrowing target of Rs 330 billion, and 34.54 percent of the Rs 217 billion target for external borrowing.
Debt servicing also saw a sharp rise, with the government spending Rs 252.48 billion by mid-April. Of this, Rs 212.93 billion went toward domestic debt repayment—Rs 170.09 billion for principal and Rs 42.84 billion in interest. An additional Rs 39.43 billion was allocated for external debt servicing, covering Rs 32.93 billion in principal and Rs 6.51 billion in interest.
The report also highlighted the impact of currency depreciation on external debt. Exchange rate fluctuations added Rs 70.09 billion to Nepal’s foreign debt obligations. The country borrows in five major international currencies under the Special Drawing Rights (SDR) framework: the US Dollar, Euro, Pound Sterling, Chinese Yuan, and Japanese Yen. The weakening of the Nepali rupee against these currencies has further burdened the external debt.
