Kathmandu: Nepal’s public debt has exceeded 45% of the country's Gross Domestic Product (GDP), reaching Rs 2.611 trillion as of February 12, 2024, according to a report published by the Public Debt Management Office.

At the beginning of the fiscal year 2024/25, Nepal’s total public debt stood at Rs 2.434 trillion. Within seven months, the debt has increased by Rs 176 billion, bringing the total to 45.77% of the country's GDP. The debt burden has been further impacted by the depreciation of the Nepali rupee against the US dollar, which added an additional Rs 36.59 billion to the country's loan obligations.

The report highlights that 50.87% of Nepal’s total debt is external, amounting to Rs 1.328 trillion, while 49.13% is internal debt, standing at Rs 1.282 trillion.

The government had set a target of raising Rs 547 billion in public debt for the current fiscal year. So far, Rs 290.57 billion has been mobilized, accounting for 53.12% of the annual target. Of this, Rs 229.15 billion has been raised domestically, meeting 69% of the domestic borrowing target of Rs 330 billion, while Rs 61.42 billion has been borrowed externally, achieving 28.31% of the foreign debt target of Rs 217 billion.

For debt servicing, the government allocated Rs 402.85 billion for repaying principal and interest. In the past seven months, Rs 178.75 billion has already been spent on debt repayment. Currently, the debt servicing expenditure accounts for 3.31% of the GDP.

With rising debt levels, concerns over Nepal’s financial stability and future repayment capacity continue to grow, highlighting the need for effective fiscal policies and sustainable economic strategies.