IMF: Public debt of Nepal on a downward path in past decade

Kathmandu February 28- A report titled ‘Nepal: Recent Fiscal Developments’ unveiled by International Monetary Fund (IMF) on Friday shows that Nepal’s public debt is on a downward trend since over the past decade while the median for 45 low income countries has seen a sharp increment since 2012. The reason behind this situation is low capital spending in the past three years despite revenue growth.

The IMF report further says strong revenue growth combined with subdued capital spending has kept budget in a surplus situation in the past three years. Unspent Rs 52 billion from Fiscal Year 2013/14 was transferred to Fiscal Year 2014/ 2015. Similarly, unspent Rs 48 billion was transferred to fiscal budget of 2015/16. In the first six months of 2015/16, government budget on a cash basis remained on a surplus of Rs 28.93 billion. Such surplus was Rs 64.95 billion in the corresponding period of the previous fiscal year.

In the review period, capital expenditures dropped by 1.5 percent to Rs 13.63 billion as various important projects were stalled because of the earthquake. The projects were affected also because of Tarai unrest and Indian blockade which created shortage of fuel and construction materials, Nepal Rastra Bank said in its six-month microeconomic report unveiled last week. Capital expenditure in the review period stood at only 6.5 percent of annual budget estimate of Rs 208.88 billion.Economists have termed the government’s failure to cash in on low interest rates through internal burrowing as very unfortunate. Source: Republica