In the eight months of the current financial year, the public debt has increased by 2 trillion 41 billion 93 crore rupees. Along with this, the outstanding public debt of the government has reached 26 trillion 76 billion 3 crore rupees. This is 46.91 percent of Nepal's Gross Domestic Product (GDP). As of last June, the public debt was 24 trillion 34 billion 9 billion rupees.

According to the Public Debt Management Office, internal public debt is 13 trillion 15 billion 57 crores (23.06 percent of GDP) and external 13 trillion 60 billion 46 billion rupees (23.85 percent of GDP) as of February. This year, the government has set a target of raising public debt of 5 trillion 47 billion rupees. According to this, 3 trillion 34 billion 62 crore rupees have been raised till February. 

"Compared to the annual target, the total public debt collection is 61.17 percent," the report of the office said, "of which the progress of internal and external debt collection is 81.56 and 30.17 percent respectively." Based on this, in the remaining four months, the government has yet to collect public debt of 2 trillion 12 billion 37 million rupees. Out of which 60 billion 84 billion 58 million domestic and 1 trillion 51 billion 52 billion 81 million rupees of external debt are yet to be collected, it is mentioned in the report. 

In the current financial year, the government has allocated 4 trillion 2 billion 85 million rupees for debt service expenses. Of that, 2 trillion 1 billion 72 crore rupees have been paid till February. This is 50.08 percent of the total allocation. Debt service expenditure as a proportion of GDP is 3.54 percent as of February. 

If we look at the public debt owed by the government, now every Nepalese will have about 91 thousand rupees. Such loan last June was about 83,000. According to the National Census 078 of the National Statistics Office, the total population of Nepal is 29.1 million 64 thousand 578. This figure was calculated by dividing the outstanding public debt by this population until last February. The National Statistics Office has predicted that GDP will reach 57 trillion 5 billion rupees in the last financial year.

 Economist Dilliraj Khanal says that the ever-increasing public debt poses a risk. Since the financial year 080/81, allocations under the heading of financial management have exceeded the size of capital expenditure. This is the product of continuous increase in internal and external debt,'' he says. The result is the threat of financial imbalance.' 

Khanal predicts that there may be instability in the macro economy as the government is breaking financial discipline and increasing the budget deficit. It is not enough to allocate sufficient budget in the productive and infrastructure sectors, nor can the budget be given for programs to reduce poverty, increase income and employment," Khanal said. This indicates the possibility of a serious budget crisis in the coming year.

The report shows that public debt obligations have increased due to exchange rate fluctuations in recent months. The change in the exchange rate up to the end of February of this fiscal year has had an impact on the increase in public debt obligations of 66.29 billion. It is said that the share of foreign debt is 50.83 percent and the share of domestic debt is 49.16 percent in the total public debt as of last February.

Similarly, the Nepalese rupee has depreciated by 3.80 percent against the US dollar in mid-January compared to mid-June 2018. During the same period last year, the Nepali Rupee depreciated by 1.05 percent. At the end of January 081, the buying exchange rate of one US dollar reached 138.63. The exchange rate was 133.36 at the end of June 2008.

Due to exchange rate changes, 4 out of the last 7 financial years have had losses and the remaining years have been profitable. In the financial year 079/80, there was a loss of 59 billion 15 crore rupees. But in the financial year 080/81, there was a profit of 4.23 billion exchange rate. Especially after the 072 earthquake, Nepal took a big loan and some of the public loans were used in unproductive areas. As the government has to allocate the budget to the local level and the province along with the salary and allowance obligations, the size of the capital expenditure with the union is decreasing.