Public debt exceeds 45 per cent of country’s GDP

Kathmandu, Feb 21: The public debt obligation has crossed 45 percent of the country’s gross domestic product (GDP).

According to a report published by the Public Debt Management Office, the government’s loan stood at Rs 2.611 trillion as of February 12 in the current fiscal year 2024/25.

“The public debt was Rs 2.434 trillion at the beginning of the fiscal year, and it increased by Rs 176 billion by February 12. The total public debt as of February 12 stands at 45.77 percent of the country’s GDP,” the report stated.

Of the total public debt, 50.87 percent is external debt, and 49.13 percent is internal debt. The internal loan has reached Rs 1.282 trillion, while the external loan amounts to Rs 1.328 trillion.

The country faced an additional loan burden of Rs 36.59 billion during this period due to the depreciation of the Nepali currency against the US dollar.

The government had set a target of mobilizing Rs 547 billion in public debt for the current fiscal year. The Office reported that Rs 290.57 billion in public loans has been raised so far. The total public debt raised so far is 53.12 percent of the annual target.

The government aims to raise Rs 330 billion in domestic loans and Rs 217 billion in external loans during the current fiscal year.

As of February 12, 2024, the government has raised Rs 229.15 billion in domestic debt and Rs 61.42 billion in external debt. The domestic debt raised so far comprises 69 percent of the annual target, while the external debt raised is 28.31 percent of the target.

Additionally, the government has allocated Rs 402.85 billion for paying the principal and interest on public debt. The Office reported that Rs 178.75 billion has been paid as principal and interest in the past seven months. The debt servicing expenditure as of February 12 accounts for 3.31 percent of the GDP.

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