Nepal's public debt has grown to almost Rs 2,500 billion, with debt servicing obligations now exceeding the annual development budget, according to a report prepared by the Public Debt Management Office.

As of mid-December, the total public debt stood at Rs 2,492.91 billion, reflecting an increase of Rs 58.31 billion over five months since the start of the current fiscal year on July 16. This figure represents 43.69% of the country's Gross Domestic Product (GDP).

In the month of Mangsir (mid-November to mid-December), the government paid Rs 58.24 billion toward debt servicing while it received loans worth only Rs 21.23 billion. Exchange rate fluctuations contributed to a Rs 25.64 billion decrease in debt obligations by mid-December compared to the previous month.

The report reveals that internal debt accounts for Rs 1,217.66 billion (48.85% of total public debt), while external debt obligations amount to Rs 1,274.75 billion (51.15% of total public debt).

For the current fiscal year, the government has set a target of mobilizing loans of Rs 547 billion. As of December 15, it had mobilized Rs 192.29 billion, representing 35.15% of the annual target. This includes Rs 164 billion in internal loans (49.70% of the Rs 330 billion annual target) and Rs 28.29 billion in external loans (13.04% of the Rs 217 billion annual target).

The government allocated Rs 402 billion for debt servicing (principal and interest payment) this fiscal year, of which Rs 170.49 billion had been paid by mid-December, amounting to 2.99% of GDP.

Notably, the allocation for debt servicing exceeds Rs 352.35 billion designated for capital expenditures, highlighting a significant budgetary imbalance. By December 15, debt servicing expenditures were approximately 4.5 times higher than capital expenditures. According to the Financial Comptroller General’s Office, capital expenditure during this period stood at just Rs 40.8 billion.