In the last four months, out of the Rs 138.75 billion loan received, Rs 150.88 billion has been repaid. Of the total amount repaid, Rs 127.61 billion has been spent on principal and the remaining Rs 23.27 billion on interest.
What you should know
As of last Kartik, the government's outstanding public debt has reached 2729.41 billion rupees. This is 44.69 percent of Nepal's gross domestic product (GDP). As of last Asad, the public debt was 2674.4 billion rupees. Compared to last Asoj, the outstanding public debt as of Kartik has increased slightly. As of last Asoj, the outstanding public debt was 2724.65 billion rupees.
The Public Debt Management Office has stated that the outstanding public debt is Rs 1275 billion 960 million (20.89 percent of GDP) and Rs 1453 billion 450 million (23.80 percent of GDP) of the internal and Rs 138 billion 750 million (23.80 percent of GDP) of the external debt. Compared to the last mid-Ashar, the outstanding public debt as of mid-Kartik has increased by Rs 55 billion 360 million.
In the last four months, out of the Rs 138 billion 750 million loan received, Rs 150 billion 880 million has been repaid. Of the total amount repaid, Rs 127 billion 610 million has been spent on principal and the remaining Rs 23 billion 270 million on interest.
The amount used to pay interest on public debt is included in current expenditure. Therefore, the Rs 127 billion 610 million spent on principal repayment is deducted from the Rs 138 billion 750 million raised during that period. Adding Rs 44.22 billion due to changes in foreign exchange rates to the amount received, the public debt increased by Rs 55.36 billion in the last two months.
In the first four months of the current fiscal year (Shrawan, Bhadra, Asoj and Kartik), the government has collected Rs 138.75 billion. The public debt collected during this period is 23.29 percent of the annual target. In the last four months, the receipt of internal debt is Rs 120 billion (33.15 percent of the annual target) and external debt is Rs 18.75 billion (8.03 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, as can be clearly seen from the report of the Public Debt Management Office.
In the first quarter of the current fiscal year, the government has paid Rs 150.88 billion for principal and interest payments on debt. This is 36.71 percent of the annual target. Of this, the office's data shows that Rs 131.65 billion (38.32 percent) was spent on principal and interest on internal debt and Rs 19.23 billion (28.51 percent) on principal and interest on external debt. In this fiscal year, the government has allocated Rs 411.1 billion for debt service expenses.
The report mentions that due to the increase in the value of foreign currencies including the US dollar, Nepal's outstanding public debt increased by Rs 44.22 billion in last Kartik as well. Due to exchange rate changes, there has been a deficit in 4 of the last 7 fiscal years, while there has been a profit in the remaining years.
The total outstanding public debt as of last Kartik is 44.69 percent of the gross domestic product (GDP). The National Statistics Office has projected that GDP will reach Rs 610.7 billion in the current fiscal year. The share of foreign debt in the total public debt as of last Kartik is 53.25 percent and the share of domestic debt is 46.75 percent.
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. Experts say that the result is also the risk of fiscal imbalance.
In the fiscal year 2080/81 and fiscal year 2081/82, the allocation under the heading of financial management exceeded the size of capital expenditure. This means that the government's priority is on paying off the principal of public debt rather than on development. However, in the current fiscal year, the amount allocated for capital expenditure is more than the budget allocated under the heading of financial management.
