The government of Nepal now owes more than Rs 2,150 billion.
The Public Debt Management Office reports that as of 14 May 2023, Nepal owes a total of Rs 2154 billion and 123.9 million in public debt.
This includes a total of Rs 1083 billion and 473.9 million in domestic debt and a total of Rs 1070 billion and 649 million in external debt.
As of mid-July of last year, when the current fiscal year 2079/80 had begun, Nepal’s public debt burden was Rs 2013 billion 296.4 million.
In the final 10 months of the current fiscal year, the government incurred new debt totaling Rs 140 billion, 827.5 million.
With a GDP of Rs 4851 billion 620 million, Nepal’s state debt appears to be 44.40 percent of the economy.
The slow economic growth rate due to low capital formation and the increasing public debt ratio could lead to an economic crisis in the near future.
In the first 10 months of the current fiscal year, the government issued a total of Rs 230 billion 246.7 million in new public debt, as reported by the Public Debt Management Office.
During the same time period, the government made principal and interest payments totaling Rs 143 billion 420.2 million.
As of May 14 this year, the government’s spending on principal and interest payments on public debt has already outpaced spending on capital projects by about Rs 18 billion.
So far this fiscal year, as of May 14th, the government has spent Rs 125,670,000,000 on the capitalized category.
One factor leading to the deficit budget was the government’s dwindling ability to increase tax collections.
However, a sizable portion of the annual budget went toward paying down the principal on the ever-increasing state debt.