Nepal's Public Debt Nears Rs 3 Trillion, Tops 45% of GDP

Nepal's total public debt has surged to Rs 2.97 trillion in the fiscal year 2082/83, accounting for 45.07% of the country's Gross Domestic Product (GDP), according to the Public Debt Management Office. The debt stock increased by Rs 300.86 billion over the past year, highlighting the growing fiscal burden. During the review period, the government borrowed Rs 447.16 billion, but over 70% of the amount (Rs 313.31 billion) was used to repay the principal of existing loans, leaving only Rs 133.85 billion available for actual government spending. The report also shows weak mobilization of foreign loans, with the government securing only 37.88% of its targeted external borrowing due to low capital expenditure. Meanwhile, domestic borrowing reached almost its annual target, increasing reliance on costlier internal debt. A stronger U.S. dollar also added Rs 167 billion to Nepal's debt burden through exchange rate fluctuations alone. In addition, the government spent Rs 73.82 billion on interest payments during the year, raising concerns among economists that rising debt, limited productive investment, and growing debt-servicing costs could put further pressure on Nepal's economy.