Debt burden down to Rs19k per person

KATHMANDU, AUG 15 -

Each Nepali had a debt burden of Rs19,450 as of the last fiscal year 2014-15, down from Rs20,069 in the previous fiscal year. The figure has been calculated based on the country’s projected population of 28 million in 2015 and 27.66 million in 2014.

The country’s debt burden shrank by Rs8.88 billion in the last fiscal year compared to the previous fiscal, according to the Financial Comptroller General’s Office (FCGO). This resulted in the per capita debt burden also going down.

According to the FCGO, the debt burden had been reduced to Rs544.62 billion as of mid-July 2015 against Rs553.5 billion the previous fiscal-end.

Deputy Financial Comptroller General Ramesh Siwakoti said the fall in the debt burden was due to a high rate of repayment made possible by huge amounts of resources remaining unspent.

Of the total debts, foreign loans amount to Rs342.96 billion (63 percent) while the rest are domestic loans. The foreign loan portion fell by Rs3.85 billion during the last fiscal year. As per the FCGO’s report, Nepal’s foreign debt liability dropped to a weaker dollar.

Out of the total foreign debt, the country’s liability for multilateral loans stood at Rs308.61 billion while the liability for bilateral loans was Rs34.34 billion. Loans received from the International Development Association (IDA), a wing of the World Bank, and the Asian Development Bank make up about 93 percent of the total multilateral loans.

Nepal owes Rs146.08 billion to the IDA, the biggest in the group. It is followed by the ADB’s loan of Rs140.53 billion. Regarding bilateral loans, the country’s liability to Japan is the largest. The country owes a total of Rs11.47 billion to Japan.

Regarding internal loans which amount to Rs201.65 billion, the credit taken through development bonds make up the biggest portion. The government has so far received domestic loans of Rs57.07 billion by issuing development bonds.  

Domestic debt shrank 2.4 percent to Rs201.65 billion. The FCGO said it was due to significant repayments compared to the issuance in the last fiscal year.

The total debt is equivalent to 25.63 percent of the country’s GDP of Rs2,124 billion, with foreign loans making up 16.14 percent. Over the last seven years, debt has been on a decreasing trend. In the fiscal year 2008-09, the debt-GDP ratio was 40 percent.

Nepal paid out a total loan amount of Rs73.73 billion over the period. It includes Rs9.26 billion in interest payment. Of the total repayment, Rs20.07 billion (27 percent) was paid to the foreign sector.

According to Siwakoti, the debt amount, both external and domestic loans, could increase this year due to the government’s reconstruction plan following the April 25 earthquake.

Debt Burden compared (in billion Rupees)

Fiscal Year    2010-11    2011-12    2012-13    2013-14    2014-15    

Domestic loan    184.12    213.92    211.87    206.68    201.65    

Foreign loan    259.50    309.28    333.44    346.81    342.96

Total liability    443.62    523.20    545.31    553.50     544.62

Source: The Kathmandu Post