2011年-世界发展银行全球_Mongolia_Quarterly_Economic_Update_April_2011_29页_2mb

Mongolia Quarterly Economic Update Summary

Core Content

This report provides an overview of Mongolia's recent economic and social developments, focusing on growth, fiscal management, inflation, and the performance of various sectors. It also highlights the role of the World Bank in supporting Mongolia's economic policies and the challenges associated with resource-based economic growth.

Main Points

Economic Growth

• Mongolia's economy grew by 6.1% year-on-year (yoy) in 2010, following a 1.3% contraction in 2009 due to the global crisis.
• The broad-based recovery in 2010 was led by transportation (16% yoy), construction (38% yoy), and wholesale and retail trade (23% yoy).
• The mining sector contracted by 2% yoy in Q4 of 2010.
• Industrial production growth slowed in late 2010 but picked up again in March 2011 to 10.6% yoy, compared to 1.4% yoy a year earlier.

Employment and Poverty

• Formal unemployment increased slightly to 3.6% in March 2011, while registered unemployment remained stable at around 40,000 persons.
• The overall unemployment rate was estimated at 9.4% in Q4 2010, down from 13% in December 2010.
• Informal labor markets showed no change in the total number of casual workers, but construction material markets saw an increase in informal workers due to higher activity.
• Real wages in informal markets rose by 18% from December to March 2011.
• Despite the wage increase, 40% of the surveyed population still indicated that their earnings did not meet basic needs.

Inflation

• Consumer price inflation moderated in March 2011 to 7.4% yoy, down from 11% yoy in February, due to declining meat prices.
• Food prices remained high globally, particularly in China and Russia, from which Mongolia imports most of its food.
• Meat prices in Mongolia are expected to stay elevated for some time due to reduced livestock herds from the dzud and strong demand from China.
• Urban poor are most affected by rising food prices, as they spend a large portion of their income on food.

Fiscal Developments

• The fiscal surplus improved significantly, reaching 2.4% of GDP in March 2011, up from a 5% deficit in March 2010.
• Revenues increased by 56% in real terms in March 2011, driven by royalties, customs duties, VAT, and corporate income tax.
• The 2011 Budget anticipates a 35% increase in government spending to MNT 779 billion (52% of GDP).
• Financing the deficit (around US$400 million) is expected to rely heavily on Tavan Tolgoi (TT) prepayments, but there are uncertainties regarding the willingness of bidders to commit large prepayments.
• If the TT prepayments do not materialize, the government may need to finance the deficit entirely through the domestic market, potentially crowding out private sector credit.

Trade and Current Account

• Imports reached a record 86% yoy in March 2011, contributing to a widening trade deficit of US$646 million.
• The current account deficit is expected to widen further in the first quarter of 2011.
• China absorbs 90% of Mongolia's exports, with coal and copper exports rising strongly, while gold exports finally picked up.
• Exchange rate fluctuated, appreciating slightly in April 2011 and depreciating by 6% in early May.
• International reserves reached record levels, with MNT deposits hitting a new peak of over 2.3 trillion in March 2011.

Banking and Capital Markets

• Non-performing loans (NPLs) increased slightly in March 2011, reaching MNT 204 billion.
• The NPL ratio remains high at 13% of total outstanding loans.
• Credit growth has been robust, with loans outstanding rising by 35% yoy.
• Regulatory and oversight issues remain a key concern for Mongolian banks, especially with the fast pace of credit expansion.
• Market capitalization has increased, with stock prices rising sharply in recent months.

Economic Outlook

• The 2011 budget plans resemble the 2008 pre-crisis period, with large cash handouts and inflationary pressures.
• There is a risk of a wage-price spiral and second-round inflation effects due to the expansionary fiscal policy.
• The Dutch Disease risk is highlighted due to current account deficits and currency appreciation.
• The Integrated Budget Law is expected to be debated in the spring parliamentary session, aiming to lock in prudent fiscal policies and support the Fiscal Stability Law (FSL).

Key Information

• Fiscal Stability Law (FSL) is a key policy to ensure counter-cyclical budgets, but its structural deficit rule (2% of GDP) will only take effect in 2013.
• Tavan Tolgoi (TT) is a major coal deposit with diverse governance structures for the East Tsankhi and West Tsankhi blocks.
• Tavan Tolgoi Financing Agreements include divestiture of 29% to international investors, 10% to Mongolian investors, and 10% to citizens via the Human Development Fund (HDF).
• The exchange rate has shown fluctuations, with a 6% depreciation in early May 2011.
• International food prices remain high, with China and Russia being the main importers.
• The banking sector faces solvency concerns and NPL issues, requiring reforms to ensure stability and efficiency.

Conclusion

Mongolia's economy is showing signs of recovery and growth, but the country faces significant fiscal and macroeconomic risks, particularly related to resource-based growth and external dependencies. The 2011 budget is expected to be expansionary, with potential inflationary effects and current account deficits. The Integrated Budget Law and FSL are crucial for long-term fiscal stability, while the Tavan Tolgoi project remains a key source of financing for the government's budget. The banking sector and capital markets also require reforms to support sustainable growth and prevent financial instability.