Nepal’s public debt reaches 42.08 percent of GDP

KATHMANDU: Nepal’s public debt has surged to 42.08 percent of the country’s gross domestic product (GDP), Finance Minister Barshaman Pun announced during a House of Representatives meeting on Sunday.

Minister Pun highlighted that there has been an improvement in the government’s capacity to repay borrowed amounts. He stated that the government has been adhering to domestic borrowing guidelines set by the National Natural Resources and Fiscal Commission.

As of mid-June 2024, Nepal’s debt burden has increased to Rs 2.434 trillion, up from Rs 2.299 trillion in mid-July 2023. The National Statistics Office has projected the country’s GDP to reach Rs 5.748 trillion by the end of this fiscal year.

Of the total debt, Rs 1.207 trillion (50.3 percent) comprises external loans, while Rs 1.192 trillion (49.7 percent) is domestic borrowing. This represents a significant increase from a decade ago when the public debt to GDP ratio was 24.8 percent, marking an 18 percent rise.

Minister Pun emphasized that the 16th periodic plan aims to reduce the public debt to GDP ratio to 39 percent by mid-July 2029. He assured that the government has adopted a policy to manage public debt according to the targets set by the periodic plan.