Himal Press 
KATHMANDU: The government’s total public debt increased by Rs 184.93 billion over the first seven months of the fiscal year, reaching Rs 2,858.97 billion in mid-February.
Public debt now amounts to 46.81% of the country’s Gross Domestic Product (GDP). According to the Public Debt Management Office (PDMO), external debt represents 24.72% of GDP, while domestic debt accounts for 22.09%.
The PDMO said in its monthly report that the government mobilized Rs 255.48 billion in new loans, while repaying Rs 163.52 billion.
Of the total outstanding debt, external debt accounts for Rs 1,509.84 billion, while domestic debt stands at Rs 1,349.13 billion.
At the start of the fiscal year 2025/26 in mid-July, total external debt was Rs 1,405.82 billion. The government borrowed an additional Rs 37.81 billion in foreign loans and repaid Rs 26.76 billion in principal and interest. However, due to exchange rate fluctuations, there was a negative adjustment of Rs 9.29 billion in external liabilities.
Domestic debt increased from Rs 1,268.22 billion in mid-July last year to Rs 1,349.13 billion. The government raised Rs 217.66 billion in domestic borrowing and repaid Rs 136.76 billion in principal and loans during the period.
Public debt is heavily skewed toward development bonds, indicating dependence on long-term domestic borrowing for government projects. According to the report, 75.45% of domestic debt, or Rs 1,017.89, is in the form of development bonds. Similarly, 22.95% of domestic debt, or Rs 309.66 billion, is in the form of treasury bills, 1.18% in citizen saving bonds, 0.04% in foreign employment saving bonds, and 0.38% in the IMF Bond.
The government has spent Rs 203.65 billion to service its public debt in the review period. Of the total spending, Rs 163.52 billion was used to repay principal and Rs 40.13 billion to pay interest.
