Public debt crosses three trillion, government raises 123 billion in loans in Q1

The country’s total public debt has crossed NRs 3 trillion by reaching NRs 3.009 trillion mid-October 2026, as the government borrowed NRs 123.32 billion during the first three months of the current fiscal year 2026/27.

According to the Public Debt Management Office’s quarterly report, outstanding public debt stood at NRs 3 trillion 9 billion 11.66 million by mid-October, equivalent to 45.59% of the country’s gross domestic product (GDP).

At the beginning of the fiscal year, total public debt stood at NRs 2.9 trillion. During the first quarter, the government mobilised NRs 123.32 billion in loans, recorded a foreign exchange gain of NRs 18.16 billion and repaid NRs 77.75 billion in principal.

External debt accounts for 53.13% of total public debt, while domestic debt makes up the remaining 46.87%. In monetary terms, external debt has reached NRs 15 trillion 988 billion 5.7 million, while domestic debt stands at NRs 14 trillion 103 billion 10.9 million.

The government has set a public borrowing target of NRs 658.28 billion for the current fiscal year. However, it mobilised only NRs 123.32 billion by the end of the first quarter, achieving 18.73% of its annual target.

Domestic borrowing reached NRs 100 billion, representing 24.39% of the annual target of NRs 410 billion. Meanwhile, external borrowing stood at NRs 23.32 billion, just 9.39% of the annual target of NRs 248.28 billion.

Domestic sources accounted for 81.09% of total borrowing during the review period, while external sources contributed 18.91%. The government still needs to raise NRs 534.95 billion to meet its annual borrowing target.

Meanwhile, the government spent NRs 98.87 billion on principal and interest payments during the first quarter, equivalent to 23.66% of the NRs 417.88 billion allocated for debt servicing in the annual budget.

Of the total expenditure, NRs 82.73 billion went towards domestic debt servicing, including NRs 65.10 billion in principal repayments and NRs 17.63 billion in interest payments. Similarly, NRs 16.13 billion was spent on external debt servicing, comprising NRs 12.64 billion in principal repayments and NRs 3.49 billion in interest.

Monthly figures show that domestic debt-servicing expenditure peaked in August at NRs 54.45 billion, compared to NRs 22.34 billion in July and NRs 5.93 billion in September. In contrast, external debt-servicing expenditure increased each month, reaching NRs 7.92 billion in September.

Government borrowing also accelerated towards the end of the quarter. It mobilised NRs 23.84 billion in July, NRs 38.10 billion in August and NRs 61.37 billion in September.

Domestic borrowing increased from NRs 20 billion in July to NRs 30 billion in August and NRs 50 billion in September. External borrowing also rose from NRs 3.84 billion in July to NRs 8.10 billion in August and NRs 11.37 billion in September.