Rs. 177 billion public debt added in first seven months of FY

Kathmandu, Feb. 22: Nepal's total outstanding public debt has increased to Rs. 2,611.06 billion as of mid-February 2025, reflecting a significant rise from the previous fiscal year.

Out of total debt, external debt amounts to Rs. 1,328.25 billion and domestic debt comprises Rs. 1,282.81 billion, according to the monthly report of the Public Debt Management Office under the Ministry of Finance.

During the first seven months of the current fiscal year 2024/25, the total outstanding debt has increased by 7.27 per cent with internal debt rising by 8.62 per cent and external by 6 per cent.

The public debt was Rs. 2,434.09 billion at the beginning of the current fiscal year and Rs. 176.97 billion was added by February 12, 2025.

Out of Rs. 176.97 billion added to public debt, Rs. 101.91 billion was added under the domestic public debt and Rs. 75.06 billion under the external public debt.

External public debt represents more than half of the total outstanding public debt as of mid-February of the current fiscal year. The share of external public debt to the total outstanding debt is 50.87 per cent while the share of domestic debt is 49.13 per cent.

Debt-to-GDP ratio surpasses 45 %

The total debt to GDP ratio is now 45.77 per cent. The external debt to GDP ratio is 23.28 per cent and the domestic debt to GDP ratio is 22.49 per cent.

At the end of fiscal year 2023/24, the debt to GDP ratio was 42.73 per cent with 21.75 per cent external debt and 20.98 per cent domestic debt.

According to the report, the country faced an additional loan burden of Rs. 36.59 billion during the period due to the dwindling value of Nepali currency against the USD.

About Rs. 290 billion public debt mobilised

The government has set a target of collecting additional Rs. 547 billion of loans to meet the budget deficit for the current fiscal year.

Out of this, Rs. 330 billion is set to be collected through domestic borrowing and Rs. 217.67 billion through external loans.

Of the annual target of debt mobilisation, the government has mobilised Rs. 290.57 billion in public debt, including domestic debt of Rs. 229.15 billion and external debt of Rs. 61.42 billion during the review period.

The total public debt raised so far is 53.12 per cent of the annual target.

The government was able to mobilise about 69.44 per cent of the annual domestic debt mobilisation target while only 28.31 per cent of the external debt mobilisation target was met during the review period.

The data also shows that the government has paid Rs. 188.75 billion as principal and interest payments of such loans. Of them, the government has paid Rs. 160.69 billion for principal and interest payments of domestic loans and Rs. 28.05 billion for external loans.

The debt servicing expenditure until mid-February is 3.31 per cent of the GDP.

The government has allocated Rs. 402.85 billion for the payment of principal and interest of the public debt in the current fiscal year.