In the last three months, out of the Rs 184 billion loan received, Rs 198.9 billion was paid out. Of the payments, Rs 90.5 billion was principal and the remaining Rs 19.38 billion was spent on interest.
What you should know
As of last Asoj, the government's outstanding public debt has reached 2724.65 billion rupees. This is 44.61 percent of Nepal's gross domestic product (GDP). As of last Asaj, the public debt was 2674.4 billion rupees. The outstanding public debt has decreased slightly compared to last Bhadra.
The outstanding public debt as of last Bhadra was Rs 2743.37 billion. The total outstanding public debt has decreased as the government has paid more than the public debt raised from mid-Bhadra to Asoj.
The Public Debt Management Office has stated that the outstanding public debt is Rs 1278.7 billion (20.93 percent of GDP) and Rs 1446.58 billion (23.69 percent of GDP) of the outstanding public debt. Compared to mid-Asad, the outstanding public debt as of Asoj has increased by Rs 50.6 billion. During that period, out of the Rs 184 billion loan received, Rs 19.89 billion was repaid. Of the total amount paid, Rs 90.5 billion was spent on principal and the remaining Rs 19.38 billion on interest.
The amount used to pay interest on public debt is included in current expenditure. Therefore, the Rs 90.5 billion spent on repaying the Rs 184 billion principal raised during that period is reduced by Rs 90.5 billion. Adding Rs 40.26 billion due to changes in foreign exchange rates to the amount received, the public debt has increased by Rs 50.6 billion in the last two months.
The government's outstanding public debt in Ashar was Rs 2674.04 billion. In the first three months of the current fiscal year (Shrawan, Bhadra and Asoj). The public debt collected during this period is 16.93 percent of the annual target.
In the last three months, the receipt of internal debt is Rs 90 billion (24.86 percent of the annual target) and external debt is Rs 10.84 billion (4.64 percent of the annual target). This year, the government has set a target of raising public debt of Rs 595 billion. Although the receipt of internal debt is good, the external debt is very low, according to the report of the Public Debt Management Office.
In Shrawan, Bhadra and Asoj, the government has paid Rs 109.89 billion for principal and interest payments on debt. This is 26.74 percent of the annual target. Of this, 96.41 billion (28.06 percent) was spent on principal and interest on internal debt and 13.47 billion (19.98 percent) on principal and interest on external debt, according to the office. In this fiscal year, the government has allocated 411.1 billion rupees for debt service expenses.
Due to the increase in the value of foreign currencies, including the US dollar, an additional burden of 40.26 billion rupees was added to Nepal's outstanding public debt last Ashoj. Although there was no additional burden in last Shrawan due to the same reason, 55.23 billion rupees were added in Bhadra. The Nepali currency weakened due to the increase in the exchange rate of foreign currencies in last Bhadra and Ashoj, which added an additional burden to the outstanding public debt.
Nepal benefits when the dollar exchange rate falls, while it loses when it rises. From Asad 2081 to Asad, an additional burden of 66.93 billion rupees was added to the outstanding public debt due to the weakening of the Nepali currency. The Nepali rupee depreciated by 2.7 percent against the US dollar in the last Bhadra compared to mid-Ashar 2082. The Nepali rupee depreciated by 0.4 percent in the same period last year. Due to the exchange rate change, there has been a deficit in 4 of the last 7 fiscal years, while it has been in profit in the remaining years.
The total outstanding public debt as of last Ashor is 44.61 percent of the gross domestic product (GDP). The National Statistics Office has projected that GDP will reach 6.1 trillion 7 billion rupees in the current fiscal year. The share of foreign debt in the total public debt as of last Ashor is 53.09 percent and the share of domestic debt is 46.91 percent.
Looking at the public debt outstanding by the government as of the end of the last fiscal year, each Nepali now has about 94 thousand rupees. According to the National Census 2078 of the National Statistics Office, the population of Nepal is 29.1 million 64 thousand 578. This figure was calculated by dividing the outstanding public debt as of last Ashar by this population.
Economists say that the continuously increasing public debt poses a risk. From the fiscal year 2080/81 to last year, the allocation under the heading of financial management exceeded the size of capital expenditure. Experts say that this is a result of the continuous increase in internal and external debt.
With the increasing debt repayment obligations, the gap between the level of capital expenditure and the budget allocated for financial management is widening, which risks shrinking the government's ability to invest in the future. Economists say that the result is also the risk of fiscal imbalance. However, in the current fiscal year, the amount allocated for capital expenditure is more than the budget allocated by the government under the heading of financial management.
