2008年-世界发展银行全球_Mongolia_Quarterly_January_2008_23页_613kb

Mongolia Quarterly Summary (January 28, 2008)

Core Content

The World Bank's Mongolia Quarterly provides an overview of recent economic and social developments in Mongolia, highlighting key trends and policy implications. The report is produced by the Poverty Reduction and Economic Management (PREM) Sector Unit and includes insights from the Mongolia Country Team.

Main Economic Developments

• Economic Growth: Mongolia achieved a real GDP growth rate of 9.9% in 2007, driven primarily by agriculture (3.4 percentage points) and services (4.3 percentage points).
• Inflation: Inflation reached 15.1% in 2007, the highest in a decade, mainly due to rising food prices, rapid monetary growth, and public sector wage increases.
• Monetary Expansion: Money supply (M2) increased by 56.3%, and currency issued in circulation rose by 48.5%. Total loans outstanding increased by 68.1%, with private sector loans up by 83.3%.
• Trade Deficit: A trade deficit of $228.3 million was recorded in 2007 due to declining gold exports (partly due to windfall tax) and robust import growth, especially in consumption and investment goods.
• Exchange Rate: Mongolia's exchange rate was reclassified by the IMF from floating to a conventional peg, with the torog fixed within ±1% of the US dollar. This limits monetary policy flexibility.
• Fiscal Surplus: Despite a planned 3.9% GDP deficit, the government recorded a 2.2% fiscal surplus in 2007, with revenues reaching 40.6% of GDP and expenditures at 39.4% of GDP.
• Fiscal Policy for 2008: The 2008 fiscal stance is expected to be expansionary, with public expenditure increasing by 44% in real terms. Wages and salaries will rise by 90%, and subsidies and transfers by 30%.
• Development Fund: The Development Fund will be included in the 2008 budget, with total resources forecasted at Tg 363 billion, allocated to investment and capital repairs (235 billion) and child allowances (105 billion).

Debt Sustainability

• Mongolia is at moderate risk of debt distress over the medium term, with public external debt as a percentage of GDP decreasing from 76% in 2000 to 37.5% in 2007.
• The NPV debt-to-GDP ratio is below the 40% threshold, but stress tests suggest potential unsustainability under severe terms of trade shocks.
• A medium-term debt management strategy is being drafted but has not yet been approved by the Cabinet.

Employment and Poverty

• Official unemployment decreased by 9.1% year-on-year to 29.9 thousand people.
• Around 50 thousand new jobs were created in 2007, with most of the increase in industrial employment coming from manufacturing.
• New poverty numbers are expected to be released in autumn 2008.
• The urban poor are more affected by food price increases, while rural poor spend a higher proportion of their consumption on food (58%).
• The impact of food price increases on growth is limited, but it will hurt poor households, potentially increasing inequality.

Impact of World Food and Oil Prices

• Food prices contributed significantly to inflation, with meat (domestically produced) and bread/cereals (imported from Russia) being major drivers.
• Oil prices, although important, had a limited direct impact on inflation (0.4 percentage points), due to Mongolia's reliance on Russian imports and the relatively low share of oil in the CPI basket.
• The government has implemented price stabilization measures, including monitoring inflation, exempting wheat imports from taxes, and subsidizing domestic wheat production.

Financial Sector

• The Mongolian banking system experienced rapid growth, with loan growth reaching 65.9% in 2007.
• Non-performing loan ratio declined to 3.7% but may worsen due to weak risk management and internal controls.
• Real lending rates have been declining, and banks are shifting focus from interest rate competition to product diversification.
• The Financial Regulatory Commission is working to improve the legal framework but faces institutional capacity and resource constraints.

Policy Recommendations

• Targeted Subsidies: Implement targeted consumption subsidies for the poorest households.
• Diversify Fuel Sources: Explore options for diversifying fuel sources and developing renewable energy (e.g., solar and wind).
• Producer Price Index: Compile and regularly publish the Producer/Wholesale Price Index (PPI), Consumer Price Index (CPI), and GDP deflator for better policy analysis.
• Exchange Rate Flexibility: Consider a freely floating exchange rate to manage inflationary pressures, though this is complicated by the Central Bank's commercial gold market operations.

Mining Sector

• The Oyu Tolgoi draft Investment Agreement was withdrawn, and the government is considering increasing state participation in the mine from 34% to 51%.
• The mining sector's impact is mainly due to high international prices rather than production expansion. Policies should aim to smooth revenue streams and invest in renewable assets.

Conclusion

Mongolia's economy has shown strong growth in 2007, driven by agriculture and services, but faces challenges in terms of inflation, trade deficits, and vulnerability to global commodity price fluctuations. The government has managed to achieve a fiscal surplus, but continued expansionary policies and increased public spending may pose risks. Addressing the impact of food and oil price increases on the poor, improving financial sector regulation, and diversifying the economy are key policy priorities.