Kathmandu, June 15 -- As Nepal's public debt obligations continue to rise, the government is increasingly finding itself in a position where it must borrow money to repay existing loans, with debt servicing costs now nearly matching the amount of public debt raised each year.

The trend has fuelled concerns among economists and former policymakers, who warn that growing repayment obligations are eroding fiscal space, limiting development spending and increasing the risk of long-term debt distress.

Finance Minister Swarnim Wagle has acknowledged that the mounting debt burden is making it increasingly difficult for the government to secure resources for development. He has publicly stated that the national debt has expanded largely because...