IDEAS home Printed from
   My bibliography  Save this article

Deficit Financing: Implications and Management


  • Govinda Bahadur Thapa Ph. D.

    (Nepal Rastra Bank)


Developing countries usually mobilize part of their resources by borrowing from internal as well as external sources to finance their development activities. These sources gradually build up the debt stock of the country. Such debt stock demands regular debt servicing, that is, principal and interest payment, which consumes scarce resources that can be used for financing development. Therefore, excessive deficits and heavy borrowing to finance that deficit drain out the resources of the developing countries. Liquidity is also involved while borrowing and servicing. Thus, both of these transactions are conducted in such a way that the country concerned always finds itself in a comfortable position with regard to the liquidity, which is known as the debt management.

Suggested Citation

  • Govinda Bahadur Thapa Ph. D., 2005. "Deficit Financing: Implications and Management," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 17, pages 16-26, April.
  • Handle: RePEc:nrb:journl:v:17:y:2005:p:16-26

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Sheku Bangura & Robert Powell & Damoni N Kitabire, 2000. "External Debt Management in Low-Income Countries," IMF Working Papers 00/196, International Monetary Fund.
    2. Feltenstein, Andrew & Iwata, Shigeru, 2002. "Why is it so hard to finance budget deficits? Problems of a developing country," Journal of Asian Economics, Elsevier, vol. 13(4), pages 531-544.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nrb:journl:v:17:y:2005:p:16-26. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dr. Bishnu Prasad Gautam). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.