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Nepal’s Fiscal Deficit Widens in FY 2024/25, Public Debt Climbs to 43.71% of GDP

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NEPSE TRADING

Nepal’s Fiscal Deficit Widens in FY 2024/25, Public Debt Climbs to 43.71% of GDP

Nepal’s fiscal position came under increasing strain in FY 2024/25 (Nepali FY 2081/82), with the government’s banking-based fiscal operations showing a deficit of Rs. 404.42 billion. This is higher than the previous year’s deficit of Rs. 379.38 billion, according to data published by Nepal Rastra Bank.

However, when accounting for all three tiers of government (federal, provincial, and local), the consolidated fiscal position remained in surplus at Rs. 130.73 billion.

Expenditure Breakdown

According to the Ministry of Finance and the Financial Comptroller General Office, the government’s total expenditure reached Rs. 1.52 trillion during the review year. This comprised:

  • Current expenditure: Rs. 980.28 billion

  • Capital expenditure: Rs. 222.68 billion

  • Financing expenditure: Rs. 320.04 billion

Revenue Collection

Government revenue mobilization stood at Rs. 1.18 trillion, which included:

  • Tax revenue: Rs. 1.05 trillion

  • Non-tax revenue: Rs. 128.94 billion

Debt Operations

The government mobilized Rs. 329.99 billion in domestic borrowing, while repaying Rs. 243.91 billion in principal. This resulted in net domestic borrowing of Rs. 86.08 billion, equivalent to 1.4% of GDP.

In addition, the government mobilized Rs. 125.40 billion in external loans during the year.

Total Public Debt

By the end of Ashad 2082, Nepal’s total public debt reached Rs. 2.67 trillion, comprising:

  • External debt: Rs. 1.40 trillion

  • Domestic debt: Rs. 1.27 trillion

As a share of GDP, total public debt stood at 43.71%, up from 42.71% in the previous year.

Government Cash Balance

At the end of Ashad 2082, the government’s cash balance across accounts (including provincial and local governments) was Rs. 130.73 billion, compared to Rs. 93.96 billion in the previous year.

The data indicates that while government spending continues to expand, revenue growth has not kept pace, pushing the fiscal deficit higher. Rising public debt relative to GDP and growing reliance on domestic borrowing have raised concerns among economists about Nepal’s long-term fiscal sustainability.

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