Kathmandu, Dec 24: With the growing size of public debt each year, the expenditure for servicing its interest has also increased, now surpassing the development budget.

According to a report issued by the Public Debt Management Office, covering data up to mid-December, Nepal’s total public debt stands at approximately Rs 2,500 billion. At the beginning of the current fiscal year, which commenced on July 16, the public debt amounted to Rs 2,434 billion. Over the following five months, an additional Rs 58.31 billion was added, bringing the total debt to Rs 2,492.91 billion. This latest figure constitutes 43.69 per cent of the country’s Gross Domestic Product (GDP).

In the month of Mangsir (November-December), the government made a payment of Rs 58.24 billion toward debt obligations, while loans worth Rs 21.23 billion were received. Additionally, due to fluctuations in the exchange rate, debt obligations decreased by Rs 25.64 billion as of December 15, compared to the end of the previous month, according to the report.

The report also highlighted that the country’s international debt obligations amounted to Rs 1,217.66 billion, or 21.34 per cent of the total public debt. Meanwhile, external debt obligations stood at Rs 1,274.75 billion, accounting for 22.35 per cent of the total public debt.

The government had the target of mobilizing Rs 547 billion for the current fiscal year and it has mobilized loans of Rs 192 billion 290 million as of December 15. The total public loan received in the five months period is equivalent to 35.15 per cent compared to the annual target.

The government has mobilized internal loans equivalent to Rs 164 billion or 49.70 per cent of the annual target of Rs 330 billion for the current fiscal year. Similarly, the government has so far raised external loans equivalent to Rs 28 billion 291 million and 800 thousand or 13.04 per cent of the annual target of Rs 217 billion.

The government has allocated Rs 402 billion for the current fiscal year to pay the principal and the interest of public debt. The Office stated that Rs 170 billion 490 million in principal and interest have been paid as of December 15. The total debt service expenditure until December 15 is 2.99 per cent based on the GDP.

The budget allocated for public debt servicing exceeds the budget earmarked under the capital heading or the annual budget that the government allocation for development construction. The government had set aside Rs 352 billion 350 million under the capital expenditure for the current fiscal year whereas it had allocated Rs 402 billion to pay the principal and interest of the public loans this fiscal year.

Observing the status of expenditure under these two headings until December 15, the expenditure for paying the principal and interest of public debt is approximately 4.5 times more than the capital expenditure. The Comptroller General’s Office stated that the government’s capital expenditure is only Rs 40 billion 800 million as of December 15. (RSS)