Nepal’s public debt has increased by Rs 84 billion in the first four months of Fiscal Year (FY) 2024/25, according to the Public Debt Management Office (PDMO). By mid-November 2024, the total public debt had risen to Rs 2.518 trillion, which represents 44.14 percent of the country’s GDP.
The total public debt is divided between internal and external borrowings. Internal debt amounts to Rs 1.252 trillion, or 21.95 percent of GDP, while external debt stands at Rs 1.265 trillion, which is 22.19 percent of GDP.
For FY 2024/25, the government set a target of mobilizing Rs 547 billion in public debt. By mid-November, the government had raised Rs 165 billion, which is 30.3 percent of the annual target. For internal borrowing, the target is Rs 330 billion, and by mid-November, the government had secured Rs 144 billion, which is 43.64 percent of the target. In contrast, the external borrowing target for the year is Rs 217 billion, but only Rs 21.72 billion had been raised by mid-November, or 10.1 percent of the target.
The government has allocated Rs 402 billion in the current fiscal year to cover interest payments on its debt. As of mid-November, the government had paid Rs 1.814 billion in interest, which is 1.90 percent of GDP during the reporting period.
This increase in public debt underscores the growing fiscal pressures facing Nepal. While internal borrowing has progressed well, external borrowing has lagged behind, and the government will need to manage debt servicing carefully. The overall fiscal sustainability of the country will depend on the government’s ability to control both its debt levels and expenditures while also raising sufficient revenues.
