Rs 2400 Billion Outstanding Public Debt in Nepal

Nepal’s outstanding public debt has surged to nearly Rs 2,400 billion, marking a significant increase of Rs 98 billion in the last 10 months of the current fiscal year, according to the Public Debt Management Office (PDMO).

At the beginning of the fiscal year, the public debt was Rs 2,299 billion. This amount now represents 42.02 percent of Nepal’s gross domestic product (GDP). The month of Baisakh alone saw a rise of Rs 11.64 billion in public debt.

Breakdown of Debt

The composition of the debt is nearly balanced between internal and external sources. Internal debt accounts for 20.76 percent of the GDP, while foreign debt makes up 21.26 percent. The PDMO’s report highlights that the government has borrowed a total of Rs 264.63 billion up to the end of Baisakh. During the same period, it managed to repay Rs 166.55 billion in principal.

Debt Collection and Repayment

Of the total loan recovery, internal loans constitute Rs 191 billion, whereas foreign loans account for Rs 73.63 billion. This indicates a higher reliance on domestic borrowing to manage the country’s financial obligations.

Implications

The rising public debt underscores the need for careful financial planning and management to ensure sustainable economic growth. The increase in debt levels also highlights the importance of balancing fiscal policies to manage both internal and external borrowing efficiently.

As Nepal continues to navigate economic challenges, the government’s ability to manage its debt portfolio will be crucial in maintaining financial stability and fostering economic development.