Kathmandu. Global public debt reached a historic high in 2025. Prolonged fiscal deficits, pandemic-related spending and ambitious development goals have added to the debt burden. The top 10 countries with the most debt are having the biggest impact on the stability of the global economy.
Top 10 countries with the most debt{
}
The world’s 10 most indebted countries have a total national debt of billions of dollars.
1. The U.S. debt has reached $32.9 trillion. Persistent budget deficits, massive military and social spending, and massive multi-trillion dollar packages during the COVID-19 pandemic have all fueled America’s debt. In 2025, U.S. interest costs will reach $970 billion. That’s more than just defense spending.
2. China’s debt has reached $ 15 trillion. This debt is the result of a rapid growth strategy, extensive infrastructure projects and urbanization. Lending by local governments and government-owned firms is important in this.
3. Japan’s debt is $ 10.9 trillion. Japan’s debt-to-GDP ratio is among the highest among large economies. This is the result of decades of economic stagnation after the economic downturn of the 1990s, demands from a growing ageing population, and sustained development plans.
4. The UK’s debt has reached $3.4 trillion. The bailout of the 2008 financial crisis and Covid-19 relief measures have led to a huge increase in government liabilities.
5. France’s debt has reached $ 3.4 trillion. Sustained social welfare spending, pandemic relief and relatively sluggish economic growth have increased the need for public borrowing.
Italy’s debt is $3.1 trillion. Sluggish growth, political instability and decades-old heavy public sector spending are the main reasons for this.
India’s debt is also $ 3 trillion. India’s huge absolute debt has been linked to extensive infrastructure projects, social welfare programmes and post-pandemic recovery efforts.
Germany has a debt of $2.8 trillion. Debt soared during the pandemic due to fiscal stimulus and expansion of social programs.
Canada’s debt is $2.3 trillion. There is a balance between strong economic growth and fiscal management along with COVID-19-related expenditures.
10. Brazil’s debt is $1.8 trillion. Political instability and economic downturn have led to massive borrowing. This has been exacerbated by social welfare programs.
Nepal’s debt situation and challenges
Even though Nepal remains outside the top 30 most indebted countries in the world, our debt burden is continuously increasing. As of July 2025, Nepal’s total public debt has exceeded Rs 2.67 trillion (about $19.3 billion). Nepal’s debt-to-GDP ratio stands at around 43.7 percent. That’s up from 22 percent in the early 2010s.
The share of internal debt in Nepal’s public debt is about 48 percent and the share of external debt is about 52 percent. This highlights the significant dependence on foreign loans for development projects.
FY 2024. The government’s borrowing increased by Rs 231 billion in 2015. This growth is mainly due to investment in infrastructure such as hydropower and roads. Apart from this, the depreciation of the Nepali rupee against the US dollar has increased by an additional Rs 73 billion.
FY 2024. In 2025, about Rs 330 billion was spent on debt service, including principal and interest payment. This has put a lot of pressure on the national budget.
Economists have warned that Nepal could fall into a debt trap if investment in the productive sector is not improved and unproductive borrowing is not controlled. However, the fact that the debt-to-GDP ratio is below 50 per cent indicates that Nepal is currently safe from the dangerous threshold (60 per cent) for low-income countries. However, managing rising costs requires careful financial strategy.
The 2025 global debt hierarchy shows that all countries, from superpowers to emerging economies, are under high financial pressure. Although Nepal is not the world’s largest indebted country in absolute terms, it is facing significant challenges in managing its debt amidst its development ambitions.
The story of Nepal’s growing debt underscores the need for government budgeting, project implementation, and long-term economic resilience. As Nepal seeks growth through borrowing, maintaining transparency and stability is paramount to the country’s financial future.
