IMF
representative P.Ramlogan yesterday met with First Deputy Premier and
Democratic Party head N.Altankhuag and the leader of Mongolian People”s
Revolutionary Party group in Parliament, D.Lundeejantsan.  He told both leaders that the IMF could not
complete its mandatory annual review of the Mongolian economy until the fate of
the proposed fiscal stability law was determined in Parliament.

Ramlogan emphasized that only a sustainable and effective macroeconomic policy would
be able to reduce poverty and the rate of unemployment, and stressed the need
to keep the budget deficit under 5 per cent of the Gross Domestic Product and
to create a fund where all income in excess of budget estimates will be put for
later use, instead of being spent immediately.

The IMF
was of the view that failure to do either could lead to runaway inflation, and
Ramlogan urged a review of the proposed budget revisions incorporating fresh
programs of expenditure that would raise budget expenses by 17 percent. The IMF
and other donor institutions may then be constrained to stop their assistance
to Mongolia. Altankhuyag agreed with the analysis and said the government was
trying to follow the IMF advice. He suggested that the IMF should also talk to
party groups in Parliament.