KATHMANDU, Jan 19: The government took public borrowing worth Rs 240.08 billion in the first five months of the current fiscal year (FY) amid increasing recurrent expenditure and slow revenue collection.
Out of the total public debt taken during mid-July and mid-December, the government generated public debt of Rs 181.05 billion in domestic loans and Rs 59.03 billion in the external loans, shows the records with the Public Debt Management Office (PDMO).
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 93 billion, according to the Financial Comptroller General Office (FCGO).
Public debt exceeds Rs 2.434 trillion, increasing by over Rs 30...
According to the FCGO, the government’s total receipts during the review period stood at Rs 574.76 billion, out of which it received foreign grants worth Rs 7.34 billion against its annual target to collect Rs 52.32 billion under the heading. The collected tax and non-tax revenues made up 39 percent of the target for the current FY.
Out of the generated public debt in the first six months of the current fiscal year, the government spent 76 percent on interest and loans repayments. The funds allocated in the financial management stood Rs 182.40 billion, which was more than three-folds of the capital expenditure amount of Rs 56.93 billion.
According to economists, the government has failed to exhaust funds received from borrowing in productive investment which has given rise to soaring burden of debt to the country. “Instead, the spending is increasing in unproductive activities in the name of surged recurrent expenditure,” said Dipendra Bahadur Chhetri, former governor of Nepal Rastra Bank (NRB).
The report of the National Statistics Office shows that the country’s estimated economic growth remained at a mere 3.4 percent in the first quarter of the current fiscal year. The achieved growth was far less than the government targeted growth of six percent for the FY 2024/25.
With the additional amount, the country’s debt burden has reached Rs 2.536 trillion. Of the amount, internal debt has crossed Rs 1.234 trillion, while that of the external debt has crossed Rs 1.301 trillion. During this period, the country faced an additional loan burden of Rs 11.61 billion as a cost of plummeting value of Nepali currency against the US dollar.
The ratio of public debt to the country’s gross domestic product (GDP) has reached 44.46 percent. Nepal’s external loans stand at 22.81 percent of the GDP and internal loans at 21.64 percent. The country’s public debt to GDP ratio has almost doubled compared to a decade ago, when it stood at only 22 percent.
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