Nepal’s public debt has reached Rs 2,536 billion 130 million by mid-January 2025, accounting for more than 44% of the country’s GDP, as reported by the Public Debt Management Office. This marks a significant rise in public debt over the last six months.
Key Statistics
- Growth in Public Debt
- At the beginning of the fiscal year on July 16, 2024, the public debt was Rs 2,434 billion 90 million.
- By January 15, 2025, the public debt increased by 4.2%, adding Rs 102 billion 30 million.
- Composition of Debt
- External Loans: 51.31% of the total debt, or Rs 1,301 billion 410 million, making up 22.81% of GDP.
- Internal Debt: 48.68% of the total debt, or Rs 1,234 billion 714 million, representing 21.64% of GDP.
- Debt Mobilization for the Fiscal Year
- The government aimed to raise Rs 547 billion in public debt for FY 2082-83 BS. By mid-January, Rs 240 billion 80 million was raised, achieving 43.89% of the target.
- Internal Debt Mobilization: Rs 181 billion 50 million (54.86% of the annual goal of Rs 330 billion).
- External Loans: Rs 59 billion 30 million (27.20% of the target of Rs 217 billion).
- Debt Servicing
- The government allocated Rs 402 billion 850 million for debt servicing in FY 2082-83.
- By mid-January, Rs 182 billion 400 million was spent on servicing the debt, which is about 3.20% of GDP.
Implications
The rapid rise in public debt underscores the increasing burden on Nepal’s economy, necessitating effective fiscal management. The government must balance between public spending and ensuring economic growth, especially considering the strain on resources for debt servicing. The figures indicate a need for cautious fiscal policies to prevent further escalation of public debt.