Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s public debt has surged to NPR 2.78 trillion (NPR 2,878.29 billion), accounting for 47.13% of the country’s Gross Domestic Product (GDP), reflecting sustained fiscal pressure and rising borrowing needs in the current fiscal cycle.
According to the Public Debt Management Office, the government added NPR 204.25 billion (0.204 trillion) in public debt within the first eight months of the current fiscal year. At the end of the last fiscal year, total public debt stood at NPR 2.67 trillion (NPR 2,674.04 billion), indicating a steady upward trajectory in sovereign liabilities.
External vs Internal Debt Structure
Of the total public debt stock:
External debt accounts for 53.16%, totaling NPR 1.53 trillion (NPR 1,530.18 billion)
Domestic debt represents 46.84%, amounting to NPR 1.35 trillion (NPR 1,348.11 billion)
This distribution signals Nepal’s continued reliance on foreign borrowing, although domestic debt remains a significant component of fiscal financing.
Government Borrowing and Targets
The government had set an annual target to mobilize NPR 559 billion (0.559 trillion) in public debt for the current fiscal year. By the end of Falgun, it has raised:
NPR 295.19 billion (0.295 trillion) in total debt
NPR 243.66 billion from domestic sources
NPR 56.80 billion from external sources
The government’s external borrowing target stands at NPR 233.66 billion, indicating that a substantial portion of planned foreign financing remains to be secured in the remaining months.
Debt Servicing Pressure Mounts
Debt servicing obligations continue to weigh heavily on fiscal resources. The government allocated NPR 411.01 billion (0.411 trillion) for principal and interest payments in the current fiscal year. By the end of Falgun, NPR 242.26 billion (0.242 trillion) has already been paid, reflecting a high burn rate in debt servicing expenditure.
Fiscal Implications
The rising debt-to-GDP ratio nearing the 50% threshold raises concerns among economists and international observers about debt sustainability, fiscal discipline, and long-term macroeconomic stability. Increased borrowing—particularly external—also exposes Nepal to currency risk, repayment pressure, and dependency on concessional financing.
At the same time, the government argues that debt mobilization remains essential to finance infrastructure development, capital expenditure, and post-pandemic economic recovery efforts, especially in a low-revenue environment.
The coming months will be critical in determining whether Nepal can balance its borrowing strategy with sustainable economic growth and effective public expenditure management.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
