Public debt doubles in five years

 The public debt has been doubled in the last five years, coinciding with the first tenure after Nepal became a federal republic.

The significant increase has been recorded since the 2017 elections, when the full-fledged federal government came to power, with seven provincial and 753 local governments. However, the federalism has little contribution in whooping increase in public debt compared to lack of good governance and fiscal discipline.

According to Public Debt Management Office, the ratio of public debt to GDP is 41.38 per cent. "The ratio of external debt to total GDP is 21.64 per cent, whereas the ratio of internal debt to total GDP is 19.73 per cent."

Nepal's GDP is currently valued at Rs 4,851 billion, according to the Central Bureau of Statistics (CBS).

In the fiscal year 2017-2018, Nepal had around Rs 917 billion public debt. But the amount has steadily increased to Rs 1,048 billion in 2018-19; Rs 1,433 billion in 2019-20; Rs 1,737 billion in 2020-21, and finally reaching to Rs 2,013 billion in the last fiscal year 2021-22, according to the Public Debt Management Office data.

As of the first quarter of the current fiscal year 2022-23, the country’s public debt totals to Rs 2,007.84 billion.

Among, the public debt, the external and domestic debt are almost equal.

The external debt stands at Rs 1,050.23 billion, while domestic debt is at Rs 957.61 billion, according to the data.

The debt, however, decreased by 0.27 per cent as of mid-October, compared to the Rs 2,013.29 billion recorded in mid-June. "The external debt increased by Rs 24.38 billion during the first quarter of the current fiscal year, whereas domestic debt decreased by Rs 29.83 billion," the data revealed.

The government has received Rs 24.70 billion in debt from development partners, in the first three months of the current fiscal year. However, it has not mobilised domestic debt yet, but preparing.

The government has cleared a total of Rs 5.84 billion (approximately $51 million) external loans in the first quarter of the current fiscal year 2022-23. But the liability of foreign loans increased by Rs 5.52 billion due to depreciation of Nepali currency against the US dollar, according to the office.

Top 10 Creditors

International Development Association (IDA) -- Rs 526.18 billion

Asian Development Bank (ADB) -- Rs 323.64 billion

Japan International Cooperation Agency (JICA) -- Rs 48.41 billion

International Monetary Fund (IMF) -- Rs 43.89 billion

EXIM Bank Line of Credit-India -- Rs 37.56 billion

Exim Bank of China -- Rs 33.51 billion

International Fund for Agricultural Development -- Rs 10.25 billion

OPEC Fund for International Development -- Rs 8.38 billion

Exim Bank, Korea -- Rs 5.62 billion

European Investment Bank (EIB) -- Rs 5.61 billion