Kathmandu: Nepal's public debt has crossed Rs 3 trillion for the first time, reaching Rs 3.009 trillion by mid-October, the end of the first quarter of fiscal year 2026/27, according to the Public Debt Management Office's monthly debt statistics. The debt stood at Rs 2.981 trillion in mid-July and now equals 45.59 percent of gross domestic product, or more than Rs 100,000 per person; a year earlier it was Rs 2.67 trillion, or 43.71 percent of GDP.

Source: Nica News (PDMO monthly statistics)

Xinhua, reporting the same Public Debt Management Office release on Friday, also said Nepal's public debt had surpassed 3 trillion Nepali rupees for the first time, reflecting a rapid increase in the debt burden over the past decade.

Source: Xinhua via EIN Presswire

External debt is 53.13% of the total

External debt accounts for Rs 1,598.80 billion, or 53.13 percent of the total, and domestic debt for Rs 1,410.31 billion, Nepal News reported. The government borrowed Rs 123.32 billion in the quarter — Rs 100 billion domestically and Rs 23.32 billion from abroad — and repaid Rs 77.74 billion in principal. That borrowing is 18.73 percent of the annual target of Rs 658.28 billion.

Debt payments reached Rs 98.87 billion by mid-October — Rs 77.74 billion in principal and Rs 21.12 billion in interest — while the Financial Comptroller General Office reported capital spending of only Rs 28.42 billion over the same period, according to OnlineKhabar reporting cited by Nica News.

Auditor general warning on how borrowing is used

Debt was Rs 1.433 trillion, or 38.05 percent of GDP, in fiscal 2019/20, according to Finance Ministry figures cited by OnlineKhabar. The Office of the Auditor General's 63rd annual report found that borrowed money has not been adequately directed to capital formation and has also paid for recurrent costs such as staff, services, consultancy and office operations. The National Natural Resources and Fiscal Commission has recommended banning domestic borrowing for recurrent and administrative spending and keeping domestic borrowing within 5.5 percent of GDP.