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The Minister of Economy, J.Erdenebat, participated in the “Minister’s Time” meeting and exchanged views regarding the financial and economic situation of Mongolia, the state budget, and measures to be taken for the improvement of debt management issues and overcoming economic difficulties, as well as future projects to be implemented this year.
During the last few years, economic growth and the growth of GDP has consistently decreased.
Economic growth, which was 17.5 percent in 2011, fell to 7.8 percent by 2014.
One of the main reasons for the creation of economic difficulties has been the decrease of prices for mining products and a decrease in foreign direct investment.
In peak years, investments totaling 4.7 billion USD were made in Mongolia, and last year investments only reached 507 million USD.
Comparing this figure to those of previous years, investment has fallen by 4.5 times. In comparison with peak years, it has decreased 9.3 times.
Foreign direct investment has an influence on the increase of foreign currency, thus, it directly influences losses to the balance of debt payments and the strength of the MNT.
As mentioned by the Minister of Finance, another reason for economic difficulty is losses of income and increased expenses in the state budget.
The Minister mentioned the economic state of the country in brief:
If the flow of foreign currency is not be increased, the balance of payments will face losses of 1.4 billion USD.
Last year the foreign trade balance was profitable. This is because of an increase in export revenue and a decrease in imports. However, the decrease of imports in comparison to the previous year, 1.1 billion MNT, created conditions for a profitable foreign trade balance.
In 2015, the construction of 37 kindergartens, 21 hospitals, 15 cultural centers, 7 sport complexes, 10 hotels, and 13 schools will be complete and facilities will be available for use.
Loans for the program to stabilize prices will be shifted to the government.
Taxes will not be increased or decreased.
