Public debt reached 26 trillion 83 billion 600 million, added 14.2 billion within the month, which is 43.94 percent of GDP.
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By the end of last July, the outstanding public debt of the government has reached 26 trillion 83 billion 600 million rupees. This is 43.94 percent of Nepal's Gross Domestic Product (GDP). This is 14.2 billion rupees more than last June. Last June, the outstanding public debt of the government was 26 trillion 69 billion 57 billion rupees.
In the first month of the current financial year, the government has collected 44.57 billion rupees in public debt. Public debt collected during this period is 7.48 percent of the annual target.
During that period, the realization of internal debt is 40 billion (11.05 percent of the annual target) and external debt is 4.57 billion (1.96 percent of the annual target). This year, the government has set a target of raising public debt of 5 trillion 95 billion rupees. The report of the Public Debt Management Office has shown that although the receipt of internal loans is good, the external ones are very low.
Last July, the government paid 36 billion 68 million rupees for the principal-interest payment of the loan. This is 8.93 percent of the annual target. Out of this, 32 billion 230 million (9.38 percent) for the principal and interest of internal debt and 4 billion 44 million (6.59 percent) for the principal and interest of external debt is the data of the office. During that period, the government has allocated 4 trillion 11 billion rupees for debt service expenses.
In the previous months, due to the increase in the price of foreign currency, including the US dollar, Nepal's outstanding public debt was being added to. But that was not the case last July. As there is no fluctuation in the exchange rate of foreign currency, there is neither profit nor loss.
If the exchange rate of the dollar falls, Nepal will benefit and if it increases, it will suffer. From June 2081 to last June, an additional load of 66.93 billion was added to the outstanding public debt due to the weakening of the Nepalese currency.
Nepalese rupee depreciated by 2.97 percent against the US dollar during that period. Similarly, compared to the end of June 2079, there was a foreign exchange loss of 59 billion 16 million rupees in the end of 2080 mostly due to the devaluation of the Nehru against the foreign currency. Due to changes in regulatory rates, there has been a loss in 4 out of the last 7 financial years, while in the remaining years it has been profitable.
The total outstanding public debt as of last July is 43.94 percent of the Gross Domestic Product (GDP). The National Statistics Office has predicted that GDP will reach 61 trillion 7 billion rupees in the current financial year. In the total public debt until last July, the share of foreign debt is 52.26 percent and the share of domestic debt is 47.74 percent.
Looking at the public debt owed by the government till the end of the last financial year, now every Nepali has about 92 thousand rupees. According to the National Census 2078 of the National Statistics Office, the population of Nepal is 291 million 64 thousand 578. This figure was calculated by dividing the outstanding public debt by this population until last June.
Economists say that ever-increasing public debt poses risks. From the financial year 2080/81 to last year, allocations under the heading of financial management have exceeded the size of capital expenditure. They say that this is a product of continuous increase in internal and external debt.
As the gap between the level of capital expenditure and the budget allocated for the financial system widens with increasing debt repayment obligations, there is a risk of shrinking the government's ability to invest in the future. Economists say that there is also a risk of financial imbalance as a result. However, in the current financial year, the amount allocated for capital expenditure is more than the budget allocated by the government under the heading of financial management.
