KATHMANDU, Aug 30: Nepal’s liability to pay public debt increased by Rs 41.11 billion last month; while the country’s total debt liability reached Rs 2.472 trillion.
The records with the Public Debt Management Office (PDMO) show that the government received a total loan of Rs 43.59 billion in one month between mid-July and mid-August. Of the amount, Rs 40 billion was raised from domestic borrowing and the remaining Rs 3.59 billion was taken as external loan.
Over the review period, the government settled Rs 19.27 billion in principal repayment and interest amount for its past debt. It included the resettlement of Rs 17 billion in liabilities for internal loans and Rs 2.27 billion for external borrowing.
Take prudent measures to curb public debt
Despite paying back a notable amount of the public debt, the increased price of the US dollar increased the financial liability of the government. According to the PDMO, the government faced an additional debt burden worth Rs 16.79 billion due to the weakened value of Nepali currency against the US dollar.
As of the end of the fiscal year 2023/24, the size of the country’s public debt stood at Rs 2.431 trillion. It included external loans of Rs 1.250 trillion and internal loans of Rs 1.180 trillion.
With the revised figure of the public borrowing, the country’s debt burden has reached 43.34 percent of the gross domestic product. The share of external loans is 22.24 percent.
As the government has failed to make up for its exorbitant spending by the slow revenue collection, the country is facing an ever increasing burden of public debt in recent years. The debt burden has doubled in the past five years.
According to the PDMO, the cumulative internal and external debts stood at Rs 1.048 trillion by FY 2018/19 end. It rose to Rs 2.4344 trillion by the end of the FY 2023/24. Economists say the increased debt burden just to manage administrative costs of the economy is alarming. The government however says that the current debt size of the country is within a manageable range. “However, the government now has to consider caution on mobilizing the borrowings only for the projects that yield high rate of returns,” said Finance Minister Bishnu Prasad Paudel, speaking at the House of Representatives on Wednesday.
For the current fiscal year, the government has set a target to raise a total of Rs 547 billion in debt. This includes a target of Rs 330 billion in domestic debt and Rs 217 billion in external debt.
