Kathmandu: Nepal's steady rise in public debt over the past decade continued in fiscal year 2025-26, with total public debt increasing by more than 11 percent during the year, the government office responsible for managing public debt said on Friday.
According to the Public Debt Management Office (PDMO), public debt rose 11.25 percent year on year to 2.974 trillion Nepalese rupees (about 19.21 billion U.S. dollars) in the fiscal year 2025-26, which ended in mid-July.
Of the total public debt, external debt accounted for 53.77 percent, while domestic debt made up the remaining 46.23 percent.
Not only has public debt increased in absolute terms, but Nepal's public debt-to-gross domestic product (GDP) ratio has also risen rapidly in recent years, particularly since the country resorted to large-scale borrowing following the devastating 2015 earthquake.
According to the PDMO, Nepal's debt-to-GDP ratio stood at 45.07 percent at the end of fiscal year 2025-26, up from 43.79 percent at the end of the previous fiscal year.
However, the International Monetary Fund said in its recent report on Nepal that the country's public debt remains sustainable and that the risk of debt distress is low.
