February 23: With the increase in the share of public debt, the government has had to spend a large amount of money on financial liability management.

In the first seven months of the current fiscal year (FY), the government has spent Rs 155.24 billion on financial management, i.e. paying the principal and interest of the loans. Out of that amount, Rs 130.11 billion constitutes the principal and interest of internal debts. During the review period, the government paid internal loans of Rs 90.97 billion and interest of Rs 39.14 billion. Likewise, the government paid Rs 25.13 billion towards external loans including Rs 20.12 in principle amount and Rs 5 billion interest, according to the Public Debt Management Office under the Ministry of Finance.

The Public Debt Management Office informed that the government took loans of Rs 202.43 billion between mid-July to mid-July 2023 to mid-January 2024.

With this, the public debt of the country has increased to Rs 2386.77 billion including Rs 1184.52 billion in internal loans and foreign debts worth Rs 1202.24 billion.

As of the end of last fiscal year, the country’s public debt stood at Rs 2295.43 billion.

As of mid-January of the current fiscal year, Nepal’s total public debt has reached 44.36 percent of the GDP. Experts say that the country can withstand the pressure of public debt up to 50 percent of the GDP.

In the current year, the government has allocated a large amount of budget to pay interest on internal debts.