Nepal’s public debt doubles in five years

KATHMANDU: Nepal’s public debt has seen a significant increase in recent years, nearly doubling since the 2017 elections.

Data released by the Public Debt Management Office shows that in the fiscal year 2017/2018, Nepal’s public debt was around Rs 917 billion. However, this amount has steadily increased to Rs 1,048 billion in 2018/2019, Rs 1,433 billion in 2019/2020, Rs 1,737 billion in 2020/2021, and finally reaching Rs 2,013 billion in 2021/2022.

As of the first quarter of the current fiscal year 2022/2023, the country’s total public debt has reached Rs 2,007.84 billion.

The country’s external debt currently stands at Rs 1,050.23 billion, while its internal debt is at Rs 957.61 billion. According go the office, the debt decreased by 0.27% as of mid-October, compared to the Rs 2,013.29 billion recorded in mid-June. The country’s external debt increased by Rs 24.38 billion during this time period, while domestic debt decreased by Rs 29.83 billion.

In the first three months of the current fiscal year, the government raised Rs 24.70 billion in debt from external sources. However, it did not mobilize debt from the domestic market during this time. Instead, it cleared a total of Rs 5.84 billion (approximately $51 million) in external loans. The liability of foreign loans increased by Rs 5.52 billion due to the depreciation of the Nepali currency against the US dollar, according to the office.

The country’s GDP is currently valued at Rs 4,851 billion, and the ratio of public debt to GDP is 41.38%. The ratio of external debt to total GDP is 21.64%, while the ratio of internal debt to total GDP is 19.73%. These numbers indicate that Nepal’s public debt has grown significantly over the past few years and that a significant portion of this debt is external, rather than domestic.

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