Publication: Nepal - Joint World Bank-IMF Debt Sustainability Analysis
Date
2019-02
ISSN
Published
2019-02
Author(s)
World Bank
International Monetary Fund
Abstract
Nepal’s risk of external debt distress
remains low. Under the revised IMF/World Bank Debt
Sustainability Analysis Framework for Low Income Countries
(LIC-DSF), all debt and debt service ratios are projected to
remain below relevant indicative threshold values. Following
a prolonged decline, to 25 percent of GDP in mid-2015, the
sum of external and domestic public debt rose to 30 percent
of GDP in mid-2018. A further rise in total public debt is
projected, to about 35 percent of GDP in the medium term and
about 48 percent of GDP in the long term, owing to
continuing fiscal and current account deficits, as the
authorities implement fiscal federalism and aim to put the
economy on a higher growth path. Stress tests suggest that
debt burden indicators are vulnerable to growth/exports
shocks and natural disasters. This underscores the
importance of implementing sound macro-economic policies.
Efforts to improve the business climate and competitiveness
through high-quality public investment and structural
reforms would support growth and expand foreign exchange
income streams.
Citation
“World Bank; International Monetary Fund. 2019. Nepal - Joint World Bank-IMF Debt Sustainability Analysis; Nepal - Joint World Bank-IMF Debt Sustainability Analysis. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/32555 License: CC BY 3.0 IGO.”