Public debt interest bill reaches Rs 14.87 billion in first two months

KATHMANDU: The government spent Rs. 14.87 billion on public debt interest payments alone during the first two months of fiscal year 2026/27.

According to the Public Debt Management Office’s latest public debt liabilities status report, the government spent Rs 13.25 billion as interest on domestic debt and Rs 1.61 billion as interest on foreign debt between mid-July and mid-September of the current fiscal year.

The amount is 0.23% of the country’s total GDP.

The government has allocated Rs 417.88 billion for debt servicing in the current fiscal year. Of the total amount, it spent Rs 85.01 billion by mid-September, which is equivalent to 20.34% of the annual allocation. The government spent Rs 76.79 billion on domestic debt servicing in the review period. This includes Rs 63.54 billion spent on principal payments.

Similarly, the government spent Rs 8.21 billion on foreign debt servicing during the review period.  Of the total amount, Rs 6.59 billion went into principal repayments.

Debt servicing during the first two months of the fiscal year amounted to 1.29% of GDP.

Meanwhile, total public debt fell slightly to Rs 2,973.05 billion in mid-September, compared to Rs 2,981.7 billion at mid-July, i.e., the start of fiscal year 2026/27.

According to the Public Debt Management Office, total outstanding debt fell in mid-September despite a foreign exchange loss of Rs 436.3 million during the period.

The public debt amounted to 45.05% of Nepal’s gross domestic product

The monthly debt report of the PDMO shows external debt accounted for 54.19% of the total public debt, while domestic debt made up the remaining 45.81%.

The government has set a target of raising Rs 658.28 billion in public debt during the current fiscal year. By mid-September, it had raised Rs 61.05 billion, which is 9.28% of the annual target.

Domestic borrowing accounted for Rs 50 billion, or 81.89% of total borrowing during the period, while external borrowing stood at Rs 11.05 billion, or 18.11%.

Against the annual targets, domestic and external borrowing had reached 12.20% and 4.45%, respectively, by mid-September.