2010年-世界发展银行全球_Mongolia_Economic_Retrospective_2008-2010_64页_2mb

Mongolia Economic Retrospective: 2008-2010 Summary

Core Content

This document presents a World Bank study on Mongolia's economic performance and policy responses from mid-2008 to April 2010, highlighting the impact of the global economic downturn on the country's economy, particularly the mining sector. It outlines the external shocks, fiscal and current account imbalances, banking sector vulnerabilities, and the policy actions taken to stabilize the economy.

Main Points

External Shocks

• Copper Price Collapse: The global downturn caused a sharp decline in copper prices, which fell by 65% from US$8,700 per ton in April 2008 to US$3,000 per ton in March 2009.
• Export Demand Decline: Mongolia's largest trading partner, China, saw a significant drop in import demand, which worsened the trade and current account balances.
• Structural Weaknesses Exposed: The economic structure and policy environment were revealed as fragile due to over-reliance on mineral revenues and poor fiscal and monetary management.

Fiscal and Current Account Deficits

• Fiscal Balance Deterioration: The fiscal balance moved into deficit in 2008, with the non-mining deficit rising from 7.3% of GDP in 2006 to 15.3% in 2008.
• Current Account Deficit: The current account shifted from a surplus of 6.7% of GDP in 2007 to a deficit of 14% in 2008 and over 15% in early 2009.
• Reserve Losses: The Bank of Mongolia (BoM) incurred substantial reserve losses (US$500 million) as it attempted to maintain a de facto peg to the US dollar, leading to a 38% depreciation of the MNT between late 2008 and early 2009.

Banking Sector Vulnerabilities

• Credit Boom and NPLs: A credit boom during the boom years led to a significant increase in nonperforming loans (NPLs), which worsened during the crisis.
• Concentrated Lending: Lending was heavily concentrated in sectors like construction, increasing exposure to sector-specific shocks.
• Loss of Confidence: A major bank failure in late 2008 and a drop in domestic currency demand led to a crisis of confidence and deposit outflows.

Policy Response

• Government Actions: The government implemented strong fiscal, monetary, and exchange rate policies, supported by political leadership and bipartisan consensus.
• International Support: Development partners provided budget and balance of payments support, as well as technical assistance.
• Mining Reforms: The signing of the long-awaited Oyu Tolgoi (OT) Investment Agreement in 2009 marked significant progress in mining sector reform.

Economic Recovery

• Real Activity Recovery: Real GDP growth picked up strongly in 2009, though it fell by 1.6% in 2009 after a 8.9% increase in 2008.
• Inflation and Interest Rates: Inflation fell sharply in 2009, but real interest rates on MNT deposits were negative, leading to currency shifting.
• Social Impact: The informal sector workers were most affected by the crisis, with a sharp decline in real wages and increased poverty.

Key Information

Key Indicators

• Fiscal Deficit: Non-mining fiscal deficit increased from 7.3% of GDP in 2006 to 15.3% in 2008.
• Current Account Deficit: Reached 14% of GDP in 2008 and over 15% in early 2009.
• Exchange Rate: The MNT depreciated by about 38% between late 2008 and early 2009.
• Unemployment: Registered unemployment rose sharply due to the crisis.

Policy and Institutional Measures

• Fiscal Stability Law: Adopted to manage the upcoming mining boom and prevent fiscal instability.
• Deposit Guarantee: Issued in November 2008 to restore public confidence in the banking sector, though it left many customers uncertain.
• Mining Sector Reforms: Included the Oyu Tolgoi Investment Agreement and efforts to improve investment planning and efficiency.

Comparative Analysis

• Copper Producers: Mongolia's experience was more severe than other copper producers due to its weak economic and policy environment.
• Chile's Experience: Chile's flexible exchange rate, inflation targeting, and structural balance rule helped stabilize its economy during the crisis, unlike Mongolia's rigid currency peg and lack of fiscal discipline.

Outlook and Challenges

• Growth Prospects: Mongolia's medium and long-term growth outlook is favorable, driven by the mining sector.
• Policy Challenges: Continued fiscal prudence is necessary to bridge the gap before the OT project boosts revenues.
• Inflation Management: Monetary and fiscal policies must respond to rising inflationary pressures to avoid a repeat of the boom and bust cycle.
• Banking Sector Reform: Addressing ongoing solvency problems in the banking sector is crucial for future economic stability.
• Poverty Protection: Implementing targeted poverty benefits is needed to ensure fiscal sustainability and protect the poor from mining volatility.
• Investment and Infrastructure: Improved investment planning and appropriate policy frameworks are essential to support future infrastructure development.

Conclusion

The 2008-2010 economic downturn severely impacted Mongolia, exposing structural weaknesses and leading to fiscal and current account deficits. Despite these challenges, the government and international partners implemented strong policy responses that led to economic stabilization. Moving forward, the focus must remain on fiscal discipline, banking sector reform, and sustainable development to ensure long-term economic resilience and growth.