[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110166-en":3,"doc-seo-110166-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},110166,962075006959,"Anda","https://ap-avatar.wpscdn.com/avatar/e0002397efbe92a78e?_k=1776741047341049297",8,"Research & Report","Nepal - Joint World Bank-IMF Debt Sustainability Analysis - Public Disclosure","The Nepal Joint World Bank-IMF Debt Sustainability Analysis assesses both external and overall public debt risks, concluding low risk of debt distress. While a mechanical signal from the present value of external debt-to-exports under export and combined shock scenarios points to moderate risk, staff judgment lowers the rating due to Nepal’s unusually high remittances. Other external indicators remain below thresholds, and the present value of public debt-to-GDP does not breach limits across scenarios. Public debt is projected to peak at 50% of GDP in FY2025/26, conditional on prudent fiscal consolidation, tax and spending reforms, and concessional external borrowing.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nMathew Verghis and Manuela Francisco (IDA) and Anne-Marie Gulde-Wolf and Maria Gonzalez (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \n\n| NEPAL: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | Low |\n| Overall risk of debt distress | Low |\n| Granularity in the risk rating | No Applicable |\n| Application of judgment | Yes |\n\nBoth external and overall public debt in Nepal are assessed at low risk of debt distress.1 Present value (PV) of external debt-to-exports ratio breaches the indicative threshold under an export and a combined shock scenarios, suggesting a mechanical rating of moderate risk of debt distress. Still, similar to last year’s DSA, staff has applied judgement to assess external debt to be at low risk of debt distress due to Nepal’s unusually high level of remittances, making exports—and hence debt-to-exports ratios—a less relevant indicator than for most economies. Remittances are the major source of foreign exchange earnings in Nepal, which along with concessional external financing, help the country maintain an adequate level of reserves and meet its debt obligations despite a sizeable trade deficit. All other external debt indicators are below their respective indicative thresholds in all stress-tests. The PV of public debt-to-GDP ratio does not breach the indicative threshold under any scenario. Public debt stood at 44 percent of GDP in FY2020/21: lower than projected in the last year’s DSA due to higher-than-projected GDP growth and better-than-expected fiscal outturns. The debt is projected to peak at 50 percent of GDP in FY2025/26 and gradually subside afterwards. The assessment nevertheless is contingent upon prudent execution of the medium-term fiscal consolidation strategy (as envisaged in the ECF-supported program), including tax revenue and spending reforms, and continued utilization of external borrowing at concessional terms as envisaged in Nepal’s Medium Term Debt Management Strategy (MTDS) .  \n1 Nepal’s debt carrying capacity remains strong, based on Nepal’s composite indicator (CI) score. The CI is calculated at 3 . 17, based on the October 2022 World Economic Outlook (WEO) and the 2021 World Bank Country Policy and Institutional Assessment (CPIA) index.  \nThe assessment also stresses the importance of reforms to diversify Nepal’s exports, improve productivity and competitiveness, and enhance resilience to shocks, in particular natural disasters.  \n1. Public debt in this DSA comprises debt from general government, central bank (borrowing on behalf of the government), as well as government’s guarantees (Text Table 1) . Nepal’s provincial and local governments have no debt, but their borrowing is now regulated by the Public Debt Management Act, enacted in October 2022, and should be monitored carefully. The social security fund and extra budgetary funds currently are not allowed to borrow and thus do not have debt either. IMF disbursements in 2020-2022 were used for direct budget support, and bond issuances by the central bank were only for the purpose of monetary policy operations. The government has provided guarantees for the debts of State-Owned-Enterprises (SOEs), and the current stock of guarantees—totaling NPR 34 billion (0 .8 percent of GDP)—is included in the debt stock. SOEs cannot borrow externally. On domestic borrowings by SOEs, the majority of the medium-and long-term loans are from the central government, and thus are already covered under central government debt. SOE liabilities not covered by public debt are part of the contingent liability stress test as the government is working to improve its debt statistics, including that of SOEs.  \n2. Public debt is defined in the LIC DSF to include the negative balance of the Treasury Single Account (TSA) .2 According to the Government Finance Stat","cbCaia6cnt8GJqt7","https://ap.wps.com/l/cbCaia6cnt8GJqt7","pdf",1171350,1,22,"English","en",105,"# Risk assessment results\n## External debt distress risk\n## Overall public debt distress risk\n# Debt indicators and scenario analysis\n## Present value metrics and thresholds\n## Stress tests and applicability of judgment\n# Public debt composition and projections\n## Debt definition and components\n## Guarantees, SOEs, and Treasury Single Account balance\n# Policy conditions and reform priorities\n## Fiscal consolidation and reforms\n## Export diversification and shock resilience","[{\"question\":\"What is the overall risk of debt distress for Nepal in this analysis?\",\"answer\":\"Both external debt and overall public debt are assessed at low risk of debt distress.\"},{\"question\":\"Why does the analysis still rate external debt risk as low despite a mechanical moderate signal?\",\"answer\":\"The present value of external debt-to-exports breaches indicative thresholds under scenarios, but staff applies judgment because Nepal’s high remittances make exports—and related ratios—less representative than for most economies.\"},{\"question\":\"How is public debt projected to evolve, and what conditions does the assessment depend on?\",\"answer\":\"Public debt is projected to peak at about 50% of GDP in FY2025/26 and then subside, contingent on prudent medium-term fiscal consolidation, tax and spending reforms, and continued concessional external borrowing.\"}]",1784484195,55,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"nepal-joint-world-bank-imf-debt-sustainability-analysis-public-disclosure","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/nepal-joint-world-bank-imf-debt-sustainability-analysis-public-disclosure/110166/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-22","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What is the overall risk of debt distress for Nepal in this analysis?","Question",{"text":75,"@type":76},"Both external debt and overall public debt are assessed at low risk of debt distress.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Why does the analysis still rate external debt risk as low despite a mechanical moderate signal?",{"text":80,"@type":76},"The present value of external debt-to-exports breaches indicative thresholds under scenarios, but staff applies judgment because Nepal’s high remittances make exports—and related ratios—less representative than for most economies.",{"name":82,"@type":73,"acceptedAnswer":83},"How is public debt projected to evolve, and what conditions does the assessment depend on?",{"text":84,"@type":76},"Public debt is projected to peak at about 50% of GDP in FY2025/26 and then subside, contingent on prudent medium-term fiscal consolidation, tax and spending reforms, and continued concessional external 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