Ratio of public debt to GDP reaches 45.77 percent
KATHMANDU, Feb 19: Nepal’s public debt has crossed Rs 2.611 trillion as of mid-February this year.
According to the Public Debt Management Office (PDMO), the amount of borrowings increased Rs 140.37 in the first seven months of the current fiscal year. During the review period, the government received additional borrowings of Rs 290.57 billion, while it paid back Rs 150.20 billion out of its loan liabilities.
Public debt exceeds Rs 2.434 trillion, increasing by over Rs 30...
The increased debt burden resulted from the soaring budget deficit of the government. In the review period, the state treasury witnessed a negative balance of Rs 97.82 billion, according to the Financial Comptroller General Office (FCGO).
With the new development, the ratio of public debt to the country’s gross domestic product (GDP) has reached 45.77 percent. In the past one month, the ratio increased by 1.31 point percentage, from 44.46 percent. The per capita debt has reached around Rs 90,000.
Madhu Kumar Marasini, member secretary of the National Planning Commission, said adverse impacts of the soaring public debt have started to be seen in the economy. According to him, with the increased pressure to pay back interest and principal, there has been a shortfall of investment in government run projects.
As of mid-July 2024, the country’s total amount of debt was recorded at Rs 2.434 billion. While the government has aimed to mobilize public borrowings of Rs 547 billion in the FY 2024/25, it has collected a total of Rs 290.57 billion as of now. In the review period, the government has already raised 53.12 percent of the annual targeted public debt.
Out of the total public debt, Rs 1.282 trillion stands for internal borrowings while Rs 1.328 trillion for the external borrowings. In the current FY, the government aims to collect internal loans of Rs 330 billion and external loans of Rs 217 billion.
The government officials have been blaming the increased liabilities on social security and grants being provided to the sub-national governments. The government’s overwhelming expenditure under these headings is the reason for soaring public debt, they say. However, the analysts attribute it to the government’s increasing expenditure in the unproductive sector.
Economist Dipendra Bahadur Chhetri said the government has failed to exhaust funds received from borrowing in productive investment. According to him, the spending is increasing in unproductive activities in the name of surged recurrent expenditure.
