Mongolia Quarterly, October 2008

The recent worsening of the financial crisis in the United States and the contagion to the world real economy are adding pressures for Mongolia to address macroeconomic imbalances. In particular, the fall in copper prices and the shortage of liquid...

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Bibliographic Details
Main Author:	World Bank
Format:	Report
Language:	English en_US
Published:	Washington, DC 2017
Subjects:	ABSORPTIVE CAPACITY ADMINISTERED PRICES AGGREGATE DEMAND AGRICULTURE ANNUAL GROWTH ARREARS BALANCE OF PAYMENTS BANKING SYSTEM BASE PRICE BILL BORDER PRICE CAPITAL ACCOUNT CAPITAL ADEQUACY CAPITAL INVESTMENT CASH TRANSFER CASH TRANSFERS COMMODITY COMMODITY PRICES CONSUMER CREDIT CONSUMER PRICE CONSUMER PRICE INDEX COPPER PRICE COPPER PRICES CORN PRICES CREDIBILITY CREDIT GROWTH CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT DIVIDEND DIVIDENDS DOMESTIC BANKS DOMESTIC CAPITAL DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC ECONOMY DOMESTIC INFLATION DOMESTIC MACROECONOMIC POLICIES DOMESTIC PRICE DOMESTIC PRICES DOMESTIC SAVING ECONOMIC DEVELOPMENTS ECONOMIC GROWTH ECONOMIC SLOWDOWN ELASTICITY ENERGY PRICES EQUIPMENT EXCESS LIQUIDITY EXPANSIONARY FISCAL POLICY EXPENDITURE EXPENDITURES EXPORT EARNINGS EXPORT GROWTH EXPORT REVENUES EXPORTS FINANCIAL CRISIS FINANCIAL DEVELOPMENTS FINANCIAL INTERMEDIARIES FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SYSTEM FISCAL DISCIPLINE FISCAL POLICY FIXED EXCHANGE RATE FOOD PRICES FORECASTS FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN FINANCIAL MARKETS FOREIGN RESERVES GDP GLOBAL OUTPUT GOLD GOLD PRICES GOVERNMENT ACTION GOVERNMENT BUDGET GOVERNMENT CREDIT GOVERNMENT REVENUE GOVERNMENT REVENUES GROSS DOMESTIC PRODUCT HIGH INFLATION HIGH-INCOME COUNTRIES HOLDING HOUSEHOLD INCOMES IMBALANCES IMMOVABLE ASSETS IMPORT IMPORTS INCOME TAX INCOME TAXES INFLATION INFLATION EXPECTATIONS INFLATIONARY IMPACT INFLATIONARY PRESSURE INFLATIONARY PRESSURES INSTRUMENT INSURANCE INTEREST PAYMENTS INTERNATIONAL BEST PRACTICE INTERNATIONAL PRICES INTERNATIONAL RESERVES INTERNATIONAL STANDARDS INVENTORIES INVESTMENT EXPENDITURES JOB CREATION LABOR MARKET LENDING PORTFOLIO LIQUIDITIES M1
Online Access:	http://documents.worldbank.org/curated/en/340811468123892568/Mongolia-quarterly-October-2008 http://hdl.handle.net/10986/28196

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Summary:	The recent worsening of the financial crisis in the United States and the contagion to the world real economy are adding pressures for Mongolia to address macroeconomic imbalances. In particular, the fall in copper prices and the shortage of liquidities worldwide will imply a slowdown of global economic growth, lower copper prices, and reduced foreign direct investment (FDI). The implications for Mongolia, a larger current account deficit, much lower government revenues, and continued large investment needs, will pose significant policy challenges for the new government to maintain growth while lowering inflation. Fiscal tightening will be a key to prevent inflation from permanently affecting expectations and to reduce the current account deficit. This includes no further increase in public wages, no further increase in universal cash transfers, and a prioritized investment program limited to what the absorptive capacity of the economy can bear. Fiscal space should be kept for a targeted social safety net to protect the most vulnerable. Reducing inflation is always painful, but the slower the authorities react, the more protracted the process is, with deeper impact in economic activity, employment and poverty.

Mongolia Quarterly, October 2008

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