Nepal’s Public Debt Reaches Rs 2.523 Trillion as Debt-to-GDP Ratio Hits 18-Year High

Nepal’s public debt has surged to Rs 2.523 trillion, with an alarming Rs 136.31 billion in additional public debt accumulated in the first three months of the current fiscal year. Out of this, Rs 115 billion was borrowed domestically and Rs 21.31 billion from external sources. As of mid-October, the debt-to-GDP ratio stands at 44.23 percent, the highest since FY 2005/06.

Analysts and Nepal Rastra Bank (NRB) research caution that the current debt-to-GDP ratio, far exceeding the ideal 35.43 percent, risks crowding out investments, increasing taxes, and burdening future generations. The government is set to spend Rs 402 billion on loan repayments this fiscal year, surpassing capital expenditure allocations by Rs 50 billion. While the government attributes rising debt to slow revenue collection, experts highlight unchecked unproductive spending as the key issue.