Positive changes emerge in economy www.montsame.mn
Ulaanbaatar /MONTSAME/ According to the review of implementation of the third phase of the IMF's Extended Fund Facility, Mongolia's economic growth was higher than expected, reported Geoff Gottlieb, head of IMF's working group.
He, also emphasized that increase in mining raw materials' prices has contributed to reaching economic growth in a short period of time.
Minister of Finance Ch.Khurelbaatar said "The IMF's working group is leaving back after working in Mongolia since January 25. As a result of the IMF's program, many positive changes has been recorded in the Mongolian economy. In 2017, our economic situation was difficult. Foreign exchange reserves accounted to USD 1 billion. Early 2017, we paid USD 580 millions for bond repayment and we faced a lot of difficult situations. However, with implementing the IMF's program economy has recovered and even grown by 5 percent over the past period. Foreign currency reserves exceeded USD 3 billion, and we drew foreign direct investments of USD 1.1 millions. Moreover, budget revenues exceeded MNT 600 billions," said the Minister.
Head of IMF's working group Geoff Gottlieb: As a result of the external and internal economic situation and policies implemented by the Government of Mongolia, the economy of Mongolia is expected to increase by 5 percent in 2018 and by 6.3 percent in 2019. The Mongolian government's policy adjustment program is being funded with USD 5.5 billion by donors including IMF. Moreover, governments bonds to be paid off in 2017-2018 were successfully re-funded. Official foreign currency reserves increased by USD 1.8 billion. Overall, a range of positive outcomes were reached such as drastic deacrese in government debt. Thanks to these changes, the exchange rate has stabilized, interest rate has fallen and the government debt service schedule has been greatly improved. However, there are several risks to economic growth. In particular, there is a tendency that external demand for raw materials might reduce and oil price increase. Taking into consideration insufficient funds allocated for risk protection, monetary and financial policies should remain adequate. In the near future, it is of importance to continue strengthening the banking system, building sophisticated taxation system and improving budget monitoring," said Gottlieb. IMF noted that as a result of the program Mongolia's foreign debt issue has been resolved in positive way, and foreign currency reserves increased by USD 1.5 billion.
Minister of Finance added that "Owing to the decrease in government’s debt and positive changes in economy, individual's income tax will be set at 10 percent as before. In 2018, 2019, a decision was made on increasing salaries in line with the inflation rate."
G.Tuguldur
Published Date:2018-02-07