Public debt soars by nearly 2.5 trillion rupees in 8 months

KATHMANDU, MARCH 18: In the first eight months of the current fiscal year, nearly 2.5 trillion rupees have been added to the public debt. According to the monthly report from the Public Debt Management Office,  the total outstanding public debt increased by 2 trillion, 41 billion, and 93 million rupees to reach 26 trillion, 76 billion, and 3 million rupees.

. In relation to Nepal's economy, the very amount now accounts for 46.91% of the country’s Gross Domestic Product (GDP). Of this, internal debt occupies 23.06% of GDP, while external debt makes up 23.85%.

During the review period, the government's remaining internal debt is 13 trillion, 15 billion, and 57 million rupees, while external debt stands at 13 trillion, 60 billion, and 46 million rupees. With this, foreign debt represents 50.83% of the total public debt, while internal debt accounts for 49.16%.

As of mid-July of the current fiscal year, the remaining internal debt was 11 trillion, 80 billion, and 90 million rupees, and external debt stood at 12 trillion, 53 billion, and 19 million rupees. Due to fluctuations in exchange rates, the public debt obligation has increased by 66 billion, 29 million rupees by mid-March of this fiscal year. 

While announcing this fiscal's national budget, the government set a target to manage 5 trillion, 47 billion rupees in public debt this fiscal year. As of mid-March, it has raised 3 trillion, 34 billion, and 62 million rupees in debt, which accounts for 61.17% of the annual target.

During the review period, the government has acquired 2 trillion, 69 billion, and 15 million rupees in internal debt, and 65 billion, 47 million rupees in external debt. Of this, 81.56% of the internal debt target and 30.17% of the external debt target have been achieved.

For the current fiscal year, the government has allocated a debt service budget of 4 trillion, 2 billion rupees. As of mid-March, it paid 2 trillion, 1 billion, and 72 million rupees toward debt servicing, which is 50.86% of the allocated annual budget. In relation to the total GDP, the debt servicing expenditure accounts for 3.54%.

In the first eight months of this fiscal year, the government has reduced its internal debt by 1 trillion, 71 billion, and 45 million rupees and its external debt by 30 billion, 27 million rupees. It has spent 1 trillion, 58 billion, and 98 million rupees on principal payments and 42 billion, 74 million rupees on interest payments.

The government aims to manage 5 trillion, 47 billion rupees in public debt this fiscal year. Of this, 3 trillion, 30 billion rupees will be raised from internal debt, and 2 trillion, 17 billion, and 67 million rupees will come from foreign debt, as outlined in the budget. This year, the government is implementing a budget worth 18 trillion, 60 billion, and 30 million rupees. Following a semi-annual budget review, the government has reduced the budget size by nearly 10%.