Total Debt of Nepal Reaches Rs. 1.28 Trillion, Debt per Nepali at Rs. 42,600
August 2, 2020 | Investopaper
The debt liability of the Government of Nepal has reached Rs.1.281 trillion. As of Ashad end, 2077 the government’s internal debt has reached Rs 667 billion and external (foreign) debt has reached Rs 614 billion. Thus,the total debt owed by the government stands at Rs. 1.28 trillion.
According to the Department of Statistics, Nepal’s population has now reached 3 crores and 38 thousand. Comparing the total debt with the population, the government debt of each Nepali has reached Rs 42,600. However, the people themselves do not have to repay such loans. The government pays interest on the loan every year by making provision in the budget.
The government mobilizes revenue to meet mandatory obligations, including salaries and allowances, and to implement its plans and programs. Insufficient amount from revenue mobilization is covered by internal and external debt. Accordingly, the government had taken a total loan of Rs. 285.87 billion in the last fiscal year 2076/77.
The government had targeted to raise a total of Rs. 195 billion in internal debt and Rs. 298.83 billion in external debt for fiscal year 2076/77. The government was able to raise Rs. 194.90 billion, close to the internal debt target. However, external debt was far below the target with only Rs 90.96 billion.
At the end of Ashad 2076, the total outstanding debt of the government was Rs. 1047.90 billion. The outstanding debt burden has increased by Rs. 233.10 billion as of Ashad, 2077. In the current fiscal year 2077/78, the government has set a target of raising a total of Rs 524.50 billion. Out of which, the government aims to raise Rs 299.50 billion in foreign (external) loans and Rs 225 billion in domestic loans.
Debt at 34 Percent of GDP
Central Statistics Office estimates that Nepal’s gross domestic product (GDP) will reach Rs 37.67 billion. Accordingly, Nepal’s total debt has reached 34 percent of GDP. According to the Ministry of Finance, the total debt was 30.3 percent of GDP in FY 2075/76. The debt-to-GDP ratio has increased by 3.7 percentage points in the last one year. World Bank estimates that Nepal’s total debt will reach 38 to 40 percent of GDP in the last fiscal year 2076/77. In the current fiscal year 2077/78, government debt is projected to reach 51 percent of GDP.
