KATHMANDU: The Public Debt Management Office's half-yearly assessment for the fiscal year 2024–2025 states that by mid-December 2024, Nepal's outstanding debt had risen to above Rs 2.53 trillion. From Rs 2.43 trillion at the start of the fiscal year, this amounts to an increase of Rs 102 billion in just six months. Currently, 44.46 percent of the country's GDP is owed in debt.
Out of the total debt, foreign loans comprise 51.31 percent, amounting to Rs 1.3 trillion, which is 22.81 percent of GDP. Domestic debt makes up 48.68 percent, or Rs 1.23 trillion, equivalent to 21.64 percent of GDP. The government’s reliance on both foreign and domestic borrowing remains significant in the overall debt structure.
By mid-December, the government had secured Rs 240.8 billion in loans, which was 43.89 percent of the Rs 547 billion it had hoped to raise throughout the fiscal year. While overseas loans were Rs 59.3 billion, or 27.20 percent of the external borrowing aim, domestic borrowing amounted to Rs 181.5 billion, or 54.86 percent of the domestic debt target.
To service the debt, the government allocated Rs 402.85 billion for principal and interest payments for the fiscal year. By mid-December, Rs 182.4 billion, or 3.20 percent of GDP and 45.28 percent of the entire amount allocated, had already been spent. These payments indicate the growing burden of managing governmental debt.
The dramatic increase in debt in just six months serves as a reminder of the serious difficulties in managing finances. The need for increased efficiency in debt acquisition and allocation is highlighted by the government's inconsistent performance in reaching its borrowing goals, both domestically and externally.
The debt servicing expenditure so far indicates the substantial impact of public debt on the national economy. As Nepal's debt continues to grow, its share of GDP emphasizes the importance of prudent fiscal strategies to manage the increasing financial obligations.
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