Nepal’s Public Debt Reaches 42.08% of GDP, Finance Minister Highlights Improvement in Debt Repayment Capacity

Nepal’s public debt has surged to 42.08 percent of the country’s gross domestic product (GDP), as reported by Finance Minister Barshaman Pun during a House of Representatives meeting on Sunday. He asserted that there is an improvement in the government's capacity to repay borrowed amounts, attributing this to domestic borrowing strategies guided by the National Natural Resources and Fiscal Commission.

As of mid-June 2024, Nepal’s debt burden has escalated to Rs 2.434 trillion, up from Rs 2.299 trillion in mid-July 2023. The National Statistics Office projects 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 sourced from domestic borrowing.

Over the past decade, the public debt to GDP ratio has risen significantly, from 24.8 percent to the current 42.08 percent. Finance Minister Pun stated that the 16th periodic plan aims to reduce this ratio to 39 percent by mid-July 2029. He emphasized that the government is committed to mobilizing public debt in alignment with the targets set by the periodic plan.