Govt. borrows NPR 390 billion and repays around NPR 310 billion; outstanding public debt reaches over NPR 2.620 trillion

KATHMANDU, MAY 18: In the first ten months of the current fiscal year, the Government of Nepal borrowed NPR 390 billion while repaying NPR 308 billion in public debt. According to the monthly report published by the Public Debt Management Office, the total outstanding public debt stands at NPR 2.622 trillion.

The government had set a target of mobilizing NPR 547 billion in public debt for 2024/25. By mid-May, it had raised NPR 390.83 billion, achieving 71.45% of the annual target. Of this, NPR 301.14 billion was raised through domestic borrowing and NPR 89.68 billion through external loans, meeting 91.25% of the domestic borrowing target and 41.43% of the external borrowing target.

The annual budget for debt servicing in 2025/26 is NPR 402 billion. During the review period, NPR 308.14 billion had already been spent, representing 76.49% of the allocated amount. Based on the total Gross Domestic Product (GDP), debt servicing accounts for 5.05% of GDP.

During this review period, the government reduced its debt obligations by NPR 265.67 billion in domestic loans and NPR 42.47 billion in external loans. Of the total debt servicing, NPR 250.71 billion went toward principal repayment and NPR 57.42 billion toward interest payments. Over the same period, the total public debt increased by NPR 188.30 billion, pushing the outstanding public debt to NPR 2.622 trillion by mid-May, up from NPR 2.434 trillion at the start of the fiscal year (mid-July 2024).

In proportion to the size of Nepal’s economy, the outstanding public debt now stands at 42.94% of GDP, with domestic debt accounting for 22.20% and external debt for 23.76%. As of mid-May, the government's domestic debt amounted to NPR 1.266 trillion, while external debt stood at NPR 1.356 trillion.

During the review period, external loans comprised 51.69% of total public debt, while domestic loans made up 48.31%, according to the Public Debt Management Office. At the beginning of the fiscal year, the outstanding domestic debt was NPR 1.180 trillion, and external debt stood at NPR 1.253 trillion.

The government had planned to raise NPR 547 billion in public debt this fiscal year—NPR 330 billion from domestic sources and NPR 217.67 billion from external sources.

It may be noted that in its mid-term review, the government made a downward revision of the total budget size of this fiscal by nearly 10 per cent to NPR 1.860 trillion.