Mongolia Economic Update, December 2014

In 2014, economic growth slowed as it began to adjust to unsustainable economic imbalances. Real GDP growth softened to 7 percent in the first 9 months, from 12.8 percent in the previous year. Despite strong mining production growth of 26 percent,...

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Bibliographic Details
Main Authors:	Lee, Taehyun, Shiilegmaa, Altantsetseg, Batsuuri, Davaadalai
Format:	Report
Language:	English en_US
Published:	World Bank Group, Washington, DC 2015
Subjects:	ACCESS TO INFORMATION ACCOUNTING APR ASSET QUALITY ASSET RATIO BACKED SECURITIES BALANCE OF PAYMENT BALANCE OF PAYMENTS BALANCE SHEET BANK ACCOUNTS BANK ASSET BANK ASSET QUALITY BANK ASSETS BANK CREDIT BANK DEPOSIT BANK FINANCING BANK LIABILITIES BANK LIABILITY BANK LOAN BANK LOANS BANK MARKET BANK POLICY BANK RATE BANKING SECTOR BANKING SYSTEM BASIS POINTS BOND BOND ISSUANCE BROAD MONEY BUDGET BALANCE BUDGET DEFICIT BUDGET DEFICITS BUSINESS ACCOUNTING CAPITAL ADEQUACY CAPITAL FORMATION CAPITAL INFLOW CENTRAL BANK CENTRAL BANK BILL CENTRAL BANK BILLS CENTRAL BANK CREDIT COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL DEBT COMMERCIAL FINANCING COMMERCIAL MORTGAGE COMMERCIAL TERM COMMERCIAL TERMS COMMODITY MARKETS COMMODITY PRICE CONCESSIONS CONSUMPTION GOODS CONSUMPTION GROWTH CREDIBILITY CREDIT BOOM CREDIT EXPANSIONS CREDIT GROWTH CREDIT QUALITY CREDIT RISKS CREDITORS CREDITS CURRENCY CURRENCY DEPRECIATION CURRENCY MISMATCH CURRENCY SWAP CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT DEBT DEBT BURDEN DEBT FINANCING DEBT GUARANTEE DEBT LIABILITIES DEBT MANAGEMENT DEBT REPAYMENT DEBT REPAYMENT SCHEDULE DEBT REPAYMENTS DEBT SERVICE DEBT-SERVICE DEFICITS DEPOSIT DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DIVIDENDS DOMESTIC CREDIT DOMESTIC CURRENCY ECONOMIC DEVELOPMENTS ECONOMIC GROWTH ECONOMIC IMBALANCES ECONOMIC POLICIES ECONOMIC STABILITY EQUIPMENT ESTATE EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORT GROWTH EXTERNAL BORROWING EXTERNAL BORROWINGS EXTERNAL DEBT EXTERNAL FINANCING EXTERNAL POSITION FINANCIAL ACCOUNT FINANCIAL INFORMATION FINANCIAL PERFORMANCE FINANCIAL RESOURCE FINANCIAL VULNERABILITIES FISCAL BURDEN FISCAL CAPACITY FISCAL DEFICIT FISCAL POLICY FIXED INVESTMENT FLOATING EXCHANGE RATE FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN CURRENCY LOANS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN INVESTMENT FOREIGN INVESTORS FOREIGN LIABILITIES GOVERNMENT BOND GOVERNMENT BOND YIELDS GOVERNMENT BONDS GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT GUARANTEE HIGH INFLATION HOLDINGS HUMAN DEVELOPMENT IMBALANCE IMPORT IMPORT COMPRESSION IMPORTS IMPORTS OF CONSUMPTION INFLATION INFLATION RATE INFLATIONARY PRESSURE INFORMATION SYSTEM INSURANCE INTEREST PAYMENT INTEREST PAYMENTS INTEREST RATE INTERNATIONAL RESERVES INTERNATIONAL STANDARDS INVESTMENT INCOME ISSUANCE LABOR FORCE LABOR MARKET LENDING EXPOSURE LIABILITY LIABILITY COMPOSITION LIQUID ASSETS LIQUIDITY LIQUIDITY SUPPORT LOAN LOAN APPLICATIONS LOAN DEMAND LOAN QUALITIES LOAN QUALITY LOAN RATIO LOCAL GOVERNMENT LONG-TERM LOAN MACROECONOMIC POLICY MARKET DATA MATURITY MONETARY AUTHORITIES MONETARY CONDITIONS MONETARY POLICY MONEY SUPPLY MORAL HAZARD MORTGAGE MORTGAGE LOAN MORTGAGE LOANS MORTGAGES NON-PERFORMING LOAN NON-PERFORMING LOANS NONPERFORMING LOANS NPL OUTSTANDING LOANS PENSION PENSION SYSTEM PENSIONS PRICE INFLATION PRIVATE LOANS PRIVATE SECTOR CREDIT PROCUREMENT PROCUREMENT PLAN PRUDENTIAL REGULATION PRUDENTIAL REGULATIONS PRUDENTIAL SUPERVISION PUBLIC DEBT PUBLIC DISCLOSURE PUBLIC EXTERNAL DEBT PUBLIC INFORMATION PUBLIC SPENDING RECEIVABLES RECURRENT EXPENDITURES REGULATORY FORBEARANCE RESERVE RESERVE REQUIREMENT RESERVES RESIDENTIAL MORTGAGE RETURN SALARIES SAMURAI BOND SAVINGS BANK SHARE OF INVESTMENT SOCIAL INSURANCE FUNDS SOVEREIGN BOND SOVEREIGN DEBT STATE DEBT STRUCTURAL PROBLEMS SUPERVISORY AUTHORITIES SURPLUS SWAP TAX TAX REVENUE TAX REVENUES TIGHT MONETARY POLICY TIME DEPOSIT TRADE BALANCE TRANSPARENCY UNEMPLOYMENT RATE UNEMPLOYMENT RATES WAGES
Online Access:	http://documents.worldbank.org/curated/en/2014/12/24195219/mongolia-economic-update-december-2014 http://hdl.handle.net/10986/21802

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Summary:	In 2014, economic growth slowed as it began to adjust to unsustainable economic imbalances. Real GDP growth softened to 7 percent in the first 9 months, from 12.8 percent in the previous year. Despite strong mining production growth of 26 percent, the growth of the non-mining sector of the economy dropped to 2 percent in the third quarter from 17.4 percent a year ago. Investment sharply fell amidst declining FDI and weakening business prospects. Consumption remains relatively strong but is also gradually softening. The growth effect from stimulus measures of the last year is also wearing off in 2014 as large liquidity support from the central bank cannot be sustained in the wake of high inflation and external vulnerabilities. The current account deficit is narrowing significantly to around 11 percent of GDP from almost 30 percent in the previous three years, due to import contraction over 16 percent and stronger copper exports. However, a significant external financing gap continues amidst declining foreign investment, reducing internal reserves to less than three months import cover. Inflation remains in double digits after a strong credit boom in 2014 and continuous currency depreciation. Economic growth is likely to continue to soften in 2015 as the economy remains under pressure from the external imbalance and high inflation. To help achieve the goal of the new Solutions-oriented Government to overcome economic challenges and build a sound economic management system, the following policy actions are recommended to be considered in the economic policy framework: (1) Consolidate the off-budget spending made through the DBM into the budget; (2) prepare a credible and realistic fiscal consolidation plan to reduce the deficit; (3) monetary policy should be tightened; (4) further quasi-fiscal activities need to be avoided; and (5) the exchange rate should be left flexible.

Mongolia Economic Update, December 2014

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