Nepal’s public debt has ballooned to Rs 2.388 trillion by mid-March (Falgun) of the current fiscal year (2023/24), according to the Public Debt Management Office. This signifies a significant increase in borrowing over the past eight months.
Key Takeaways:
- Debt Surge: Nepal has added Rs 218.86 billion in new debt since the beginning of the fiscal year.
- Debt Repayment: The government has managed to repay Rs 175.5 billion of existing debt, including Rs 146.64 billion internally and Rs 28.86 billion externally.
- Debt Composition: Despite repayments, internal debt has risen by Rs 163.31 billion, while external debt has increased by Rs 55.55 billion. Currently, internal debt stands at Rs 1.185 trillion, and external debt at Rs 1.202 trillion.
- Debt Servicing Costs: The government has spent Rs 126.3 billion on acquiring new loans, while interest payments on existing debt have amounted to Rs 49.47 billion.
This rapid rise in public debt raises concerns about Nepal’s fiscal sustainability. The government will need to carefully manage its finances to ensure it can meet its debt obligations without hindering essential spending on social programs and infrastructure development.
