The Nepali government spent about one third of its revenues in repaying loans in the 2023-24 fiscal year which ended in mid-July, as the country's public debt has been ballooning in recent years.

As much as 305.37 billion Nepali rupees (2.28 billion U.S. dollars) was used for debt service during the past fiscal year, accounting for 29 percent of the total government revenues, according to the latest report unveiled by the Public Debt Management Office.

In contrast, the South Asian country allocated 191.75 billion rupees (1.43 billion dollars) as capital spending for development activities in 2023-24.

"Nepal's debt servicing has been growing alongside the rise in public debt in recent years," said Dilaram Giri, undersecretary at the Finance Ministry who served at the office until last month.

"It is necessary that we have to grow our economy to be able to repay the growing debt," he told Xinhua on Thursday.

Nepal spent 2.22 percent of its gross domestic product on debt service in 2019-20, but the ratio grew to 5.35 percent in 2023-24, according to the office.

The country's public debt now stands at 2,434.09 billion rupees (18.2 billion dollars) which accounts for 42.67 percent of GDP, up from 30.26 percent in 2018-19, the agency said.

It attributed the growing public debt to heavy borrowing in the wake of the 2015 massive earthquakes and the COVID-19 pandemic.

In 2023-24, Nepal's foreign debt grew 7.02 percent to 1,253.02 billion rupees (9.37 billion dollars), and amounts owed to multilateral lenders including the World Bank and the Asian Development Bank stood at 88.98 percent, according to the office.