The Oli-led government is facing growing criticism after it was revealed that nearly 43.47% of Nepal’s GDP is now tied up in public debt—Rs. 2.654 trillion by the end of Jestha in the current fiscal year. At the same time, the government has already spent 19.46% of the national budget—a whopping Rs. 329.6 billion—just to pay off the principal and interest on these loans.
In just 11 months, over Rs. 220 billion in new debt has been added. Public Debt Management Office data shows that debt rose from Rs. 2.434 trillion at the start of the year to Rs. 2.654 trillion by the end of Jestha. Despite setting a target to mobilize Rs. 547 billion in public loans this fiscal year, the government has managed to collect only Rs. 414.19 billion, highlighting underperformance—especially in external borrowing.
Debt Composition by Source
Budget & Debt Servicing
Loan Mobilization Progress
Despite spending a large part of the budget on repayments, the government is falling short on raising funds, especially in foreign loans—achieving only 45.72% of the target, while internal loan collection fared better at 95.45%.
Critics argue that such high debt dependence without matching development outcomes reflects poor fiscal planning and unsustainable economic management. With one-fifth of the budget going solely to service debt, essential services and infrastructure investments may suffer, making long-term growth uncertain.
