SATV, Kathmandu, May 25: Nepal’s public debt increased by over Rs. 300 billion by mid-May of the current fiscal year 2025//26.

According to the Public Debt Management Office under the Ministry of Finance, total public debt reached Rs. 2,975.04 billion by mid-May 2026, up from an opening stock of Rs. 2,674.04 billion at the beginning of the fiscal year.

The figures show that government added a net Rs. 301 billion to its debt stock during the review period.

In the single month of Baisakh (mid-April to mid-May) alone, public debt increased by Rs. 41.25 billion.

The increase in debt stock includes additional liabilities arising from exchange rate fluctuations, particularly the depreciation of the Nepali currency against the US dollar.

Of the total additional debt accumulated during the period, Rs. 113 billion was added under domestic public debt, while external public debt increased by Rs. 187.99 billion.

As of mid-May, external debt accounted for Rs. 1,593.81 billion, or 53.57 per cent of the total public debt, whereas domestic debt stood at Rs. 1,381.22 billion, making up the remaining 46.43 per cent.

During the review period, total outstanding debt rose by 11.25 per cent. External debt increased by 13.37 per cent, while domestic debt grew by 9 per cent.

The country’s debt-to-GDP ratio has reached 45.08 per cent, with external debt contributing 24.15 per cent and domestic debt 20.93 per cent.

The report shows that currency depreciation alone added Rs. 167.75 billion to the debt burden during the first 10 months of the fiscal year.

Govt. spends Rs. 292.52 billion on debt servicing

Meanwhile, the government has utilised 71.17 per cent of its allocated budget for debt servicing by mid-May.

According to the data, the government spent Rs. 292.52 billion on principal and interest payments during the review period. 

Of the total amount, Rs. 231.92 billion was used for principal repayments and Rs. 60.59 billion for interest payments.

For the current fiscal year, the government had allocated Rs. 411.01 billion for servicing public debt, including both principal and interest obligations.

Of the total debt servicing expenditure, Rs. 185.66 billion was spent on principal repayment and Rs. 50.52 billion on interest payments for domestic loans. 

Likewise, Rs. 46.52 billion was used for principal repayment and Rs. 10.06 billion for interest payments on external debt.

Debt servicing expenditure stood at 4.43 per cent of the country’s GDP during the review period.

Rs. 365 billion mobilised in public debt 

During the review period, the government also mobilised Rs. 365.16 billion in public debt by mid-May, achieving 61.30 per cent of its annual borrowing target.

Of the total public debt raised, Rs. 298.66 billion came from domestic borrowing, while Rs. 66.49 billion was mobilised through external loans.

The government has set a target of raising Rs. 595.66 billion in public debt in the current fiscal year to finance the budget deficit. 

Of this amount, Rs. 362 billion is expected to be raised through domestic borrowing and Rs. 233.66 billion through external loans.

Domestic borrowing has reached 82.50 per cent of its annual target, indicating strong internal financing activity. In contrast, external borrowing stands at 28.46 per cent of its target.

In terms of composition, domestic debt dominates total public debt mobilisation so far, accounting for 81.78 per cent, while external debt contributes 18.21 per cent.