Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Ministry of Finance has released a revised estimate showing that only 85.96 percent of the current fiscal year 2082/83 (2025/26) budget will be spent, signaling continued implementation weaknesses in public expenditure management.
Finance Minister Rameshwar Khanal unveiled the mid-year budget review report on Tuesday, revising down the overall spending outlook. The government is currently implementing a total budget of Rs 1.964 trillion, but the ministry now projects that only Rs 1.688 trillion (Rs 1.68832 trillion) will be spent by the end of the fiscal year.
Spending Breakdown
According to the revised figures:
Recurrent expenditure is estimated at Rs 1.125 trillion (Rs 1.12597 trillion)
Capital expenditure is projected at Rs 243.30 billion
Financing (debt servicing and financial management) spending is expected to reach Rs 319.04 billion
Despite the downward revision, the original allocations remain higher:
Recurrent budget allocation: Rs 1.18 trillion
Capital budget allocation: Rs 407 billion
Financial management allocation: Rs 375 billion
Mid-Year Spending Performance
By the end of the first half of the fiscal year (mid-Poush), spending performance remains weak in development outlays:
Recurrent spending: 41.25% of the annual target
Capital spending: only 12.12%
Financing spending: 40.95%
The extremely low capital expenditure ratio underscores Nepal’s persistent structural issues in project readiness, procurement processes, and inter-agency coordination, which continue to delay infrastructure and development works.
Growth Target Unchanged
Despite the spending revision, the government has maintained its economic growth target at 6 percent for the fiscal year. The unchanged projection suggests that authorities expect improved economic activity in the second half, potentially supported by higher government spending, election-related economic circulation, and gradual private sector recovery.
However, analysts note that with capital expenditure trailing far behind targets and overall budget utilization reduced, achieving the growth target will depend heavily on the pace of spending acceleration and private sector momentum in the remaining months.
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