Public debt surpasses 45% of GDP

KATHMANDU, FEBRUARY 21 : The country's public debt has surpassed 45% of its Gross Domestic Product (GDP). According to a report lately published by the Public Debt Management Office, in the first seven months of the current fiscal year, the government's total debt reached Rs 2.611 trillion.

“At the beginning of the fiscal year, such debt stood at Rs 2.434 trillion. By the last Nepali month of Magh (mid-January to mid-February), it had increased by Rs176.96 billion, bringing the total public debt to 45.77% of GDP,” the report states

. Of the total debt, 50.87% is foreign debt, while 49.13% is domestic. During the review period, domestic debt amounted to Rs 1.282 trillion, while external debt stood at Rs 1.328 trillion. The office also noted that fluctuations in exchange rates alone added NPR 36.59 billion to the debt burden during the said period.

The government had set a target of raising Rs 547 billion in public debt for 2024/24. So far, Rs 290.57 billion has been mobilized, achieving 53.12% of the annual target.

The target for this fiscal year includes Rs 330 billion in domestic borrowing and Rs 217 billion in foreign borrowing. By Magh, Rs 229.15 billion had been raised domestically, while Rs 61.42 billion had been secured externally. Based on the annual goal, domestic borrowing  reached 69%, while external borrowing was to the tune of 28.31%.

Additionally, the government has allocated Rs 402.85 billion in the current fiscal year for debt repayment, including both principal and interest. Over the past seven months, Rs 178.75 billion was already been paid. During the review period, debt servicing expenses accounted for 3.31% of the GDP.