Mongol Bank President L.Purevdorj has announced that inflation in Mongolia now stands at 10.5 percent.

The Government says it plans to keep inflation in the single digits next year, but with large salary and pension increases in the proposed 2012 budget, along with large capital outlays and ongoing “allowances” to citizens, that won’t be easy. In fact, the International Monetary Fund has warned that inflation could reach 20 percent next year.

L.Purevdorj attributes the latest inflation numbers to increased spending in the state’s revised 2011 budget, as well as changes in meat and petroleum prices.

But there are some good signs. L.Purevdorj said Mongol Bank’s research shows that meat prices will not rise much in 2012, and petroleum prices are expected to hold steady.