Public Debt of Nepal’s Government Rises to Rs. 23.87 Kharba
February 18, 2024 | Investopaper
As of Magh 2080 BS, the government’s outstanding public debt in Nepal has reached NPR 23.87 Kharba, with an increase of NPR 1.65 Kharba in just 7 months of the current financial year. This represents a significant rise from the previous Ashad when the debt stood at NPR 22.21 Kharba. Translating these figures, each Nepalese citizen now carries a debt burden of approximately NPR 82,000 based on the population of 2.92 crores.
The public debt constitutes about 44.35 percent of Nepal’s gross domestic product (GDP), which was predicted to be NPR 53.81 Kharba in the last financial year. The National Statistics Office indicates a shift in the debt composition, with external debt exceeding internal debt by approximately NPR 10.72 Arba as of Magh.
Over the past seven months, the government has made payments of NPR 1.30 Kharba towards domestic debt, with NPR 90.97 Arba allocated to principal and NPR 39.14 Arba to interest. External debt repayment during the same period amounted to NPR 25.13 Arba, with NPR 20.012 Arba going towards the principal and NPR 5 Arba as interest. Additionally, the government has acquired NPR 2.02 Kharba in new loans, resulting in an internal debt of NPR 1.50 Kharba and an external debt of NPR 52.12 Arba.
Despite releasing a budget of NPR 17.51 Kharba for the current financial year, the government has revised it to NPR 15.30 Kharba. Notably, the financial management allocation has exceeded the capital expenditure, indicating a priority shift towards debt repayment rather than development. Experts highlight the concerning trend of increasing interest payments on public debt in recent years, emphasizing the need for better utilization of funds to address the growing debt burden on the nation.
