Nepal’s public debt has skyrocketed over the last ten years, increasing more than four times as the country grappled with the aftermath of the 2015 earthquake and the COVID-19 pandemic. Data from the Public Debt Management Office reveals that Nepal’s public debt hit NPR 2.974 trillion by the end of the 2025-26 fiscal year, a significant jump from NPR 697.68 billion in 2016-17, marking a 4.26-fold surge over the decade.
The Public Debt Management Office reported an 11.25% year-on-year rise in public debt during the 2025-26 fiscal year. External debt constituted 53.77% of the total public debt, with domestic debt making up the remaining 46.23%.
Nepal heavily borrowed from both domestic and external sources to fund the reconstruction of infrastructure damaged by the 2015 earthquake. This catastrophe, which claimed nearly 9,000 lives and ravaged public and private infrastructure, including thousands of homes, led to a 31.48% surge in public debt during the 2017-18 fiscal year.
