The Government of Nepal raised around Rs 400 billion in public debt during the first 10 months of the current fiscal year (FY 2024/25), while spending approximately Rs 308.14 billion on principal and interest payments.

According to the report published by the Public Debt Management Office covering the period up to mid-May, the total public debt stood at Rs 2622 billion, up from Rs 2434 billion at the beginning of the fiscal year—an increase of Rs 188.3 billion. This amounts to 42.94 percent of the Gross Domestic Product (GDP).

As of mid-May, external debt accounted for 51.69 percent of the total public debt, or Rs 1355 billion. Domestic debt made up the remaining 48.31 percent, amounting to Rs 1267 billion. The office noted that due to higher repayments than borrowing in mid-April to mid-May, total public debt liabilities declined compared to the previous month. As of mid-April, the total debt had reached Rs 2667 billion.

While the government has made notable progress in raising domestic debt, the report shows that foreign debt mobilization remains below the annual target. “Out of the Rs 547 billion public debt targeted for this fiscal year, Rs 390.83 billion had been raised by mid-May, achieving 71.45 percent of the target,” the report stated. Of this, domestic debt accounted for 77.05 percent and external debt 22.95 percent.

The government aims to raise Rs 330 billion in domestic debt in FY 2024/25. Of that, Rs 301.14 billion has been raised, with Rs 28.85 billion still to be mobilized. Meanwhile, only Rs 89.68 billion of the targeted Rs 217 billion in foreign loans has been secured, leaving Rs 127.31 billion yet to be raised.

For debt servicing, the government had allocated Rs 402.85 billion in the current fiscal year. Of this, Rs 308.14 billion—76.49 percent of the allocated budget—had been spent by mid-May. Based on GDP, the total debt servicing cost stood at 5.05 percent by the review period, according to the Public Debt Management Office. -- RSS