Public debt reaches Rs 2.5tn, exceeds development budget: report
KATHMANDU: The increasing size of Nepal's public debt has led to higher interest servicing expenditures, now exceeding the development budget.
As of mid-December, Nepal's total public debt stands at approximately Rs 2,500 billion, according to a report from the Public Debt Management Office (PDMO). At the start of the current fiscal year on 16 July, the public debt was Rs 2,434 billion. Over the next five months, an additional Rs 58.31 billion was accrued, bringing the total debt to Rs 2,492.91 billion, which is 43.69% of the country's gross domestic product (GDP).
From mid-November to mid-December, the government paid Rs 58.24 billion towards debt obligations and received loans worth Rs 21.23 billion. Due to exchange rate fluctuations, debt obligations decreased by Rs 25.64 billion as of 15 December, compared to the previous month.
The report highlighted that international debt obligations amount to Rs 1,217.66 billion, or 21.34% of the total public debt, while external debt obligations stand at Rs 1,274.75 billion, accounting for 22.35% of the total public debt.
The government aimed to mobilise Rs 547 billion for the current fiscal year and has secured loans of Rs 192.29 billion as of mid-December, which is equivalent to 35.15% of the annual target. The government has mobilised internal loans amounting to Rs 164 billion, or 49.70% of the annual target of Rs 330 billion, and external loans amounting to Rs 28.29 billion, or 13.04% of the annual target of Rs 217 billion.
The government has allocated Rs 402 billion for the current fiscal year to pay the principal and interest on public debt. The PDMO reported that Rs 170.49 billion in principal and interest had been paid by mid-December, with total debt servicing expenditure accounting for 2.99% of GDP.
The budget for public debt servicing exceeds the capital expenditure budget, which is Rs 352.35 billion for the current fiscal year. As of mid-December, expenditure on debt servicing is approximately 4.5 times higher than capital expenditure. The Comptroller General's Office reported that the government's capital expenditure is only Rs 40.8 billion as of mid-December.
