Nepal Public Debt: Debt-to-GDP, External vs Domestic & Per-Citizen Share

Nepal's public debt is the total money the federal government owes, either to lenders inside the country (domestic debt) or to foreign governments, multilateral banks and bondholders abroad (external debt). It is the debt stock that has built up over many years, and it is different from the new borrowing announced in each annual budget. The authoritative record of this stock is the Public Debt Bulletin published every quarter by the Public Debt Management Office (PDMO) under the Ministry of Finance.

According to PDMO data for the end of fiscal year 2081/82 BS (mid-July 2025, or FY 2024/25 AD), total outstanding public debt stood at about Rs 2.674 trillion (Rs 2,674 billion). During that fiscal year alone the debt rose by roughly Rs 231 billion. For context, the stock was around Rs 2.43 trillion at the start of the year, so the government added about a quarter of a trillion rupees in twelve months.

The figure keeps climbing each quarter. By the first quarter of FY 2082/83 BS (mid-October 2025), the PDMO's Government Debt Statistics bulletin recorded total debt of about Rs 2.72 trillion. Because a large share of external loans is denominated in foreign currencies, part of each quarter's increase is simply an exchange-rate revaluation rather than fresh borrowing, so quarterly jumps do not always mean the government has taken new loans of that size.

Nepal's public debt is divided into two roughly equal halves. External (foreign) debt is money borrowed from multilateral lenders such as the World Bank's International Development Association (IDA) and the Asian Development Bank (ADB), plus bilateral creditors and a small amount of foreign-currency bonds. Domestic (internal) debt is raised inside Nepal, mainly through development bonds, treasury bills and citizen-savings instruments sold to banks, financial institutions and the public.

At the end of FY 2024/25, external debt was about Rs 1.40 trillion and domestic debt about Rs 1.26 trillion, meaning external debt made up a little over half of the total. By mid-October 2025, external debt had risen to roughly Rs 1.45 trillion (about 53 percent) and domestic debt to about Rs 1.28 trillion (about 47 percent), as exchange-rate movements enlarged the rupee value of foreign loans.

The composition matters for risk. External debt is mostly concessional (low interest, long maturity) but exposes Nepal to currency risk, because a weaker rupee against the US dollar or Special Drawing Rights raises the repayment burden. Domestic debt carries no currency risk but is generally more expensive and shorter in tenure, and heavy domestic borrowing can crowd out credit that banks would otherwise lend to private businesses.

The debt-to-GDP ratio measures the debt stock against the size of the whole economy in one year. It is the single most-watched indicator of debt sustainability because it shows whether the economy is growing fast enough to carry the debt. At the end of FY 2024/25 (mid-July 2025), Nepal's total public debt was equal to about 43.71 percent of GDP, with external debt at roughly 24.6 percent of GDP and domestic debt at about 22.1 percent.

By international standards this is still moderate. The International Monetary Fund's (IMF) Debt Sustainability Analysis has consistently rated Nepal at low risk of debt distress, partly because most external borrowing is concessional. Many analysts and the IMF treat a ratio around 50 percent of GDP as a prudent ceiling for a low-income economy like Nepal, so the country retains some headroom but is moving toward that threshold.

The ratio has almost doubled over a decade. In FY 2014/15 public debt was only about 25 percent of GDP; the 2015 earthquake reconstruction, the shift to a federal state structure with new provincial and local governments, and pandemic-era spending in 2020 and 2021 pushed it up sharply. It crossed the 40 percent mark around FY 2021/22 and has hovered in the low-to-mid 40s since, illustrating a durable upward trend rather than a one-off spike.

A per-citizen (per-capita) debt figure answers a question people search constantly: how much of the national debt is 'my' share? It is a simple, pure-logic calculation and does not represent a personal loan anyone must repay directly; it is only the total public debt spread evenly across every resident. The formula is total outstanding public debt divided by the population.

Using the PDMO year-end figure of Rs 2.674 trillion (mid-July 2025) and Nepal's 2021 census population of 29,164,578 (about 29.16 million), the per-citizen share works out to roughly Rs 91,700 per person. Using the mid-October 2025 total of about Rs 2.72 trillion against the same census population gives roughly Rs 93,300 per person. Because the census is a fixed count while the debt rises every quarter, the per-capita figure creeps upward each time the PDMO publishes a new bulletin.

Two caveats keep this honest. First, Nepal's real population is now higher than the 2021 census (annual growth is about 0.92 percent), so dividing by the census figure slightly overstates the true per-head share. Second, the per-capita number is illustrative: it does not net out the assets the borrowing financed (roads, hydropower, schools), so a rising per-capita debt is not automatically bad if it funds productive investment.

Debt servicing is the money the government spends each year on principal repayment plus interest. It is a fixed, non-negotiable claim on the budget, so a rising servicing bill squeezes the funds available for development, health and education. As debt has grown and interest rates have risen, servicing has become one of the fastest-growing lines in Nepal's federal budget.

In FY 2024/25, principal and interest payments together consumed a large share of federal spending, and press analysis of PDMO and Ministry of Finance data put debt-related payments at roughly a fifth of the annual budget. In the FY 2082/83 BS (2025/26) budget, about 21 percent of total federal expenditure was earmarked for debt repayment, underlining how much fiscal space the debt now absorbs.

The mix of servicing costs is shifting. Domestic debt, though concessional-free and short-dated, carries higher interest, so it accounts for a disproportionate share of interest payments; external servicing is smaller but exposed to exchange-rate losses, which in some quarters have added tens of billions of rupees to the debt's rupee value. This is why the PDMO reports exchange loss as a separate line in its bulletins.

Nepal's debt stock has risen roughly fivefold in nominal terms over about a decade. In FY 2014/15 total public debt was near Rs 550 billion and about 25 percent of GDP. By FY 2019/20 it had reached around Rs 1.43 trillion (about 38 percent of GDP), and the pandemic response then accelerated the climb.

The stock crossed Rs 2 trillion during FY 2022/23, reached about Rs 2.43 trillion by the start of FY 2024/25, and closed that year at about Rs 2.674 trillion. Quarterly bulletins through late 2025 and into 2026 showed the total moving past Rs 2.7 trillion and continuing upward, with the debt-to-GDP ratio drifting into the mid-40s percent range.

The upward trajectory is driven by structural factors rather than a single event: reconstruction after the 2015 Gorkha earthquake, the cost of standing up a three-tier federal system, revenue that has not kept pace with spending, and periodic exchange-rate revaluation of foreign loans. Understanding this trend is essential context for reading any single quarter's headline figure, which is why the PDMO publishes the full time series.

The Public Debt Management Office (PDMO) is the government body responsible for issuing, recording and servicing all public debt, and it publishes the definitive figures. Established under the Ministry of Finance, the PDMO releases a Public Debt Bulletin (Sarbajanik Rin Byabasthapan bulletin) and Government Debt Statistics every quarter, giving the outstanding stock, the domestic/external split, debt-to-GDP ratios and servicing data at each quarter-end.

Two other institutions cross-check these numbers. Nepal Rastra Bank (NRB), the central bank, reports public debt in its monthly and annual macroeconomic situation tables, and the Ministry of Finance publishes borrowing plans in the annual budget and in its open data portal. Because these bodies use slightly different reference dates and revaluation methods, minor differences between them are normal.

For the most current, verifiable figure, readers should consult the latest quarterly PDMO bulletin at pdmo.gov.np rather than relying on older news reports, since the debt stock changes every three months. This page anchors its headline numbers to the FY 2024/25 year-end bulletin and notes the mid-October 2025 quarterly update, but always check the newest bulletin for the up-to-the-quarter total before quoting a figure.