Description: Mongolia Quarterly Economic Update, February 2012

Mongolia Quarterly Economic Update, February 2012

Gross Domestic Product (GDP) growth accelerated to an unprecedented 17.3 percent in 2011 from 6.4 percent in 2010 and the unemployment rate fell from 13 percent in 2010 to 9 percent in 2011. However, real wages for unskilled workers in the urban in...

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Bibliographic Details
Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2017
Subjects:	ACCOUNTING ARREARS ASSET CLASSIFICATION BAILOUT BALANCE OF PAYMENTS BALANCE SHEET BALANCE SHEETS BANK LENDING BANK LOAN BANK SUPERVISION BANKING SECTOR BANKING SYSTEM BASE PRICES BASIS POINTS BIDS BLACK MARKET BONDS BUDGET DEFICITS BUDGETING BUFFER BUFFERS CAPACITY CONSTRAINTS CAPITAL ACCOUNT CAPITAL ADEQUACY CAPITAL FLIGHT CAPITAL GAINS CAPITAL INFLOWS CAPITAL INVESTMENTS CAPITAL MARKETS CASH TRANSFER CASH TRANSFERS CENTRAL BANK CENTRAL BANK BILLS COMMERCIAL BANKS COMMODITY PRICE COMMODITY PRICES COMPETITIVENESS CONSOLIDATION CONSUMER LOANS CONSUMER PRICE INDEX CONTINGENT LIABILITIES CORE INFLATION CREDIBILITY CREDIT GROWTH CREDIT LINE CREDIT LINES CREDIT RISK CREDIT RISKS CURRENCY CRISES CURRENCY CRISIS CURRENCY MISMATCHES CURRENCY SWAP CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT DEBT CRISIS DEBT SERVICE DEBTS DEFICITS DEPOSIT DEPOSIT INSURANCE DEPOSITS DEPRECIATION DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT BANK DISBURSEMENT DOLLAR PRICE DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC DEMAND DOMESTIC GOODS DOMESTIC INFLATION DUTCH DISEASE ECONOMIC DEVELOPMENT ECONOMIC GROWTH EQUIPMENT EXCHANGE RATE EXCHANGE RATE FLEXIBILITY EXCHANGE RATE MOVEMENTS EXCHANGE RATE VOLATILITY EXCHANGE RATES EXPENDITURE EXPENDITURES EXPORT EARNINGS EXPORT REVENUES EXTERNAL DEBT EXTERNAL SHOCK EXTERNAL SHOCKS FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CRISIS FINANCIAL DISTRESS FINANCIAL LIBERALIZATION FINANCIAL MANAGEMENT FINANCIAL MARKETS FINANCIAL RISKS FINANCIAL STABILITY FISCAL BALANCE FISCAL BALANCES FISCAL DECENTRALIZATION FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FIXED EXCHANGE RATE FIXED EXCHANGE RATES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIME FOOD PRICES FOREIGN BANKS FOREIGN CURRENCY FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES GLOBAL ECONOMY GLOBAL TRADE GOLD GOLD PRICES GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT BUDGETS GOVERNMENT EXPENDITURES GOVERNMENT POLICY GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SPENDING GROSS DOMESTIC PRODUCT GROWTH RATE HIGH INFLATION HUMAN DEVELOPMENT IMPLICIT GOVERNMENT GUARANTEES IMPORTS INCOME TAX INFLATION INFLATION EXPECTATIONS INFLATION RATE INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENTS INTEREST RATE INTEREST RATE SPREADS INTERNATIONAL RESERVES INTERNATIONAL STANDARDS INVESTING INVESTMENT PROJECTS ISSUANCE LABOR FORCE LABOR MARKETS LENDER LENDER-OF-LAST-RESORT LIQUID ASSETS LIQUIDITY LIQUIDITY RISKS LLC LOAN LOAN CLASSIFICATION LOAN PORTFOLIOS LOCAL CURRENCY LOCAL GOVERNMENT LOCAL GOVERNMENTS LOSS OF CONFIDENCE MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MARKET PRICES MARKET SHARE MINERAL PRICES MONETARY AUTHORITIES MONETARY POLICY MONEY SUPPLY MORTGAGE NOMINAL EXCHANGE RATE NON-PERFORMING LOAN NON-PERFORMING LOANS NPL OPEN CAPITAL ACCOUNT OUTSTANDING LOANS OUTTURN OUTTURNS PEG PERSONAL INCOME PORTFOLIO PORTFOLIO INFLOWS POVERTY REDUCTION PREPAYMENT PRUDENTIAL REGULATIONS PUBLIC INVESTMENT PUBLIC SECTOR DEBT PUBLIC SPENDING PURCHASING POWER RATES OF RETURN REAL EXCHANGE RATE REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REGULATORY CONSTRAINTS REGULATORY FORBEARANCE REMITTANCES RESERVE RESERVE REQUIREMENT RESERVES RISK AVERSION SAFETY NET SLACK SLOWDOWN SOCIAL INSURANCE FUND SOVEREIGN DEBT STOCK MARKET SUBSIDIZATION SWAP TAX TIME DEPOSITS TOTAL EXPORT TOTAL EXPORTS TOTAL IMPORTS TOTAL INVESTMENT TRADE BALANCE TRADE DEFICIT TRADE SECTORS TRADING TRADING PARTNER TRADING PARTNERS TRANSITION PATH TRANSPARENCY UNCERTAINTY UNEMPLOYMENT RATE WITHDRAWAL
Online Access:	http://documents.worldbank.org/curated/en/637771468053406763/Mongolia-quarterly-economic-update-February-2012 http://hdl.handle.net/10986/27240

Description
Summary:	Gross Domestic Product (GDP) growth accelerated to an unprecedented 17.3 percent in 2011 from 6.4 percent in 2010 and the unemployment rate fell from 13 percent in 2010 to 9 percent in 2011. However, real wages for unskilled workers in the urban informal sector are starting to fall as the inflation rate reached 11.1 percent year-on-year in December. Sharply rising government spending is the root cause of overheating: government spending rose by 56 percent in 2011 and is budgeted to rise by a further 32 percent this year, fueled by sharply rising resource revenues. This pro-cyclical fiscal policy could result in another 'boom-and-bust' cycle Mongolia experienced before, particularly as the global economy could face a substantial slowdown in growth due to the continuing European sovereign debt crisis, and which could result in a sharp drop in mineral prices and subsequently government revenues There have been major legislative developments in 2011 and early 2012 aimed at strengthening policy institutions and frameworks. The Integrated Budget Law (IBL) was passed in December 2011: this organic budget law contains measures to support fiscal sustainability and the successful implementation of the Fiscal Stability Law. It also strengthens the public investment framework by requiring feasibility studies and alignment with national priorities for projects to be included in the Public Investment Program and the budget. The Social Welfare Law was passed in early January. This mandates the provision of a targeted poverty benefit replacing the existing system of universal cash transfers. To ensure macroeconomic stability and to prevent a hard landing for the economy in case of an adverse external shock, Mongolia needs to adhere strictly to prudent fiscal policies as set out in the FSL and IBL and tightening both fiscal and monetary policy to reduce inflation, take macro-prudential action to reduce systemic risks in the banking sector and maintain a flexible exchange rate that will act as the first buffer in any external shock materializes. These are uncertain times for Mongolia. The economy faces growing headwinds from the global economic environment, while the looming elections increase domestic uncertainty. Until a substantial amount of savings has accumulated in the stabilization fund, Mongolia remains strongly exposed to volatility in commodity prices.

Mongolia Quarterly Economic Update, February 2012

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