Nepal’s public debt has increased to Rs 2.676 trillion as of mid-March, rising by Rs 241.93 billion in the first eight months of the current fiscal year. The Public Debt Management Office (PDMO) attributes this increase to high government spending and low revenue collection, which have added financial pressure on the economy.
During the review period, the government spent Rs 841.14 billion. Out of this, Rs. 758.58 billion went toward regular expenses and debt payments, while only Rs 82.56 billion was used for capital investment. Meanwhile, total revenue collection stood at Rs 739.30 billion, creating a budget deficit of Rs 101.84 billion.
Experts warn that Nepal’s rising debt is becoming a concern due to a lack of proper borrowing policies. Public debt has more than doubled in the past five years, growing from Rs 1.048 trillion in FY 2018/19 to Rs 2.434 trillion by the end of FY 2023/24. The debt-to-GDP ratio has also increased from 42.65% in mid-July 2024 to 46.91% at present.
Additionally, the depreciation of the Nepali currency against the US dollar has further added Rs 66.29 billion to the country’s debt. Of the total public debt, Rs 1.360 trillion (50.83%) is external debt, while Rs 1.315 trillion (49.16%) is domestic. The government aims to raise Rs 547 billion through public debt in the current fiscal year.
