2014年-IMF国际货币组织全球_Mongolia_2013_Article_IV_Consultation_75页_1mb

Summary of the 2013 Article IV Consultation for Mongolia

Core Content

The 2013 Article IV consultation with Mongolia, conducted by the IMF, assessed the country's economic developments and policies. The report outlines key challenges and recommendations for ensuring sustainable growth and macroeconomic stability.

Main Points

Economic Progress and Prospects

• Mongolia has experienced significant economic growth over the past decade, with per capita income increasing fivefold to over $3,000.
• The economy is projected to grow at 12% in 2013 and 9.5% in 2014, driven by the start of production at the Oyu Tolgoi (OT) copper and gold mine.
• Mining output is expected to expand further over the next five years, contributing to mineral GDP growth of about 16% annually from 2013 to 2017.
• Non-mining GDP growth is projected at 11% in 2013 and depends on continued public investment and the continuation of monetary stimulus.

Inflation and Balance of Payments (BOP) Pressures

• Inflation is expected to rise above 10% in 2013 and remain elevated through late 2014 due to exchange rate depreciation and continued loose monetary policy.
• BOP pressures have been exacerbated by negative shocks to FDI and coal exports, and by expansionary fiscal and monetary policies.
• Gross international reserves are currently about $2.4 billion, sufficient for about 3.7 months of imports, but the decline in net international reserves is not sustainable.

Policy Challenges

• Macroeconomic policies have become unsustainably loose, particularly in fiscal and monetary areas.
• The government needs to reduce domestic demand growth, manage BOP pressures, and control inflation through a combination of fiscal adjustment, unwinding of monetary stimulus, and maintaining exchange rate flexibility.

Key Recommendations

• Fiscal Policy:

  • The 2013 budget deficit is expected to exceed 10% of GDP, even with measures to reduce spending.
  • The Fiscal Stability Law (FSL) should be fully implemented, including DBM spending in the budget.
  • Public investment projects should be reprioritized based on absorptive and implementation capacity.
  • The government should focus on more realistic revenue projections for the 2014 budget.

• Monetary and Exchange Rate Policy:

  • The Bank of Mongolia (BOM) should phase out its price stabilization program, mortgage program, and liquidity injections.
  • The BOM should strengthen its monetary policy framework while maintaining exchange rate flexibility.
  • The current exchange rate depreciation should be allowed to continue to absorb BOP pressures.

• Financial Sector:

  • Banking sector vulnerabilities include weak supervision, inadequate provisioning, high loan concentration, and dollarization.
  • The credit-to-deposit ratio is high and rising, indicating potential instability.
  • The recent failure of Savings Bank highlights the need for improved financial sector oversight and resilience.

• Structural Reforms:

  • The government should build on the new Investment Law to improve the business climate and attract FDI.
  • Continued reforms are needed to support non-mining growth and strengthen the foundation of the economy.

Risks and Scenarios

Strong Policy Scenario

• The FSL is implemented with the 2014 budget based on realistic revenue projections.
• Off-budget spending is phased out by the end of 2015.
• The BOM phases out its stimulus programs by mid-2014.
• This scenario leads to more sustainable fiscal and monetary policies and reduces the risk of a BOP crisis.

Weak Policy Scenario

• Current expansionary policies continue, leading to higher non-mining growth but greater BOP risks.
• The government delays implementing the FSL and continues off-budget spending.
• The BOM unwinds stimulus programs gradually, leading to a larger exchange rate depreciation and higher inflation.
• In this scenario, the risk of a BOP crisis increases significantly, with potential non-mining output losses of about 20 percentage points over a 4-year horizon.

External Risks

• Spillovers from weakening external demand for commodities could further reduce mining export revenues.
• The global shift toward more consumption-based growth in China, which accounts for over 90% of Mongolia’s exports, poses a significant risk to Mongolia's economy.
• External shocks and continued loose policies could expose the banking system to vulnerabilities, worsening financial stability and growth prospects.

Conclusion

The consultation highlights the need for Mongolia to transition from an expansionary policy regime to a more sustainable one. While the country's medium-term prospects are promising due to its natural resource endowment and proximity to growing economies, current policies risk long-term economic instability. The IMF encourages the government to implement the FSL, reduce fiscal and monetary stimulus, and strengthen the financial sector to ensure macroeconomic stability and inclusive growth.