The federal government has been able to secure only Rs 99.20 billion in external loans during the first 11 months of the current fiscal year, achieving less than half of its annual target of Rs 217 billion.

According to a report released by the Public Debt Management Office, the external loans received as of mid-June account for just 45.72 percent of the target. In contrast, internal debt mobilization is performing strongly, with 95.45 percent—or about Rs 315 billion—of the Rs 330 billion annual target already achieved.

Most of the foreign loans are allocated under capital expenditure to fund development projects. However, sluggish progress in development activities has restricted the inflow of external loans, said Gopi Krishna Koirala, chief of the Public Debt Management Office.

Koirala told the state-run national news agency RSS that international donor agencies primarily offer financial assistance in the form of project-based loans rather than direct budgetary support. As a result, delays or inefficiencies in project implementation significantly affect the receipt of such funds.

“Overall, weak development expenditure has led to a slowdown in external loan inflows,” RSS quoted Koirala as saying.

The Office of the Auditor General reported that as of June 21, capital expenditure had reached only about 42 percent of its annual target.

Public Debt Reaches Rs 2,654 Billion

Meanwhile, the Public Debt Management Office stated that the total outstanding public debt has now reached Rs 2,654 billion. At the start of the fiscal year, the total public debt stood at Rs 2,434.9 billion. By the end of May, an additional Rs 220.58 billion had been added, RSS reported

As of the end of May, public debt accounted for 43.47 percent of Nepal’s gross domestic product (GDP). Of the total debt, 52.06 percent consists of external loans while 47.94 percent is domestic debt. As of mid-June, internal debt totaled Rs 1,272.53 billion, while external debt stood at Rs 1,382.12 billion.

For the current fiscal year, the government had targeted to mobilize Rs 547 billion in public debt. By mid-June, Rs 414 billion had been raised, amounting to 75.72 percent of the annual target.

Additionally, the government spent Rs 329.6 billion over the past 11 months to service principal and interest payments on public debt, according to the Public Debt Management Office.

– With inputs from RSS