Nepal’s public debt surpasses Rs 2.36 trillion in FY 2023/24 Q1

Kathmandu: As of mid-November in the Fiscal Year (FY) 2023/24, Nepal has witnessed a notable surge in public debt, accumulating over Rs 57.71 billion in the first quarter alone.

This has propelled the total public debt to Rs 2.36 trillion, up from Rs 2.29 trillion recorded in mid-July, as reported by the Public Debt Management Office (PDMO).

Breakdown of the data from PDMO indicates that Nepal’s domestic debt has reached Rs 1.18 trillion, while the external debt stands at Rs 1.17 trillion.

In the initial four months of the fiscal year, the government disbursed interest payments totaling Rs 65.45 billion on internal debt and Rs 16.18 billion on external debt.

Analyzing the debt collection landscape from mid-July to mid-November, a total of Rs 113.2 billion was raised, with internal debt contributing Rs 97.31 billion and external debt accounting for Rs 15.85 billion.

During the first quarter of the fiscal year, expenditure on principal and interest payments of public debt was nearly three times higher than the government’s capital expenditure.

By mid-November, the government had allocated Rs 29.99 billion for capital expenditure, while a substantial Rs 81.64 billion was directed towards servicing public debt through interest payments.

This evolving financial scenario underscores the challenges and priorities faced by the government in balancing capital investments and managing the escalating public debt, marking a critical aspect of Nepal’s fiscal landscape in the current fiscal year.