Macro Assessment presented

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Every year, by May 1, the general macro assessment of the annual budget is presented to the government. The Minister of Finance gave information in regards to it, recently.

Minister B.Javkhlan said, “Mongolia’s economy is expected to stabilize and grow. However, there may be a risk looking at the international situation, if we do not keep our economic growth.

Next year, real GDP growth will be 6.5 percent. Inflation, or the increase in the prices of consumer goods, will be kept at eight percent.”

The minister then continued, “The balanced income of the consolidated budget is around 21 trillion MNT. The maximum amount of expenditure is about 23 trillion MNT. Budget expenditures are estimated to increase by 10 percent from 2023. The government has presented a budget estimate of loss of the total balance worth 1.833 trillion MNT. This vision will be submitted to the Parliament on Monday.”

According to the Finance Minister, the government had the mid-term strategy for 2018 to 2021, and 2022 to 2025 approved by

the Parliament. In relation to this, the management of the government’s external debt is being carried out. As of September 2022, the external debt situation was very heavy. However, as of the first quarter of 2023, due to taking measures to improve the balance of payments, increase exports, and reduce the foreign trade deficit, Mongolia has been completely freed from the risk of default related to foreign debt.

The work of paying 368.7 million USD for Gerege bond, which should be paid on May 1, has been set. It is an outstanding debt. It was possible to pay this debt within the framework of the ‘Century-2’ project, which was implemented in the first quarter of this year, said the Minister, B.Javkhlan. Over the past three years, debt of some 1.6 billion USD has been paid off. The reserves for 30 billion JPY from Samurai bonds, which should be paid on December 25, have been saved.

Furthermore, they are working to prepare the 500 million USD necessary for Euro bond debt due in September. Foreign debt is expected to reach 400 million USD in the first half of this year. Until September, the Euro bond debt will be paid by collecting money from payoffs of bad loans from the Development Bank and other possible sources. If the Development Bank fails to pay this, the government has no choice but to pay, so the government’s guarantee has been reserved in this year’s budget. He explained that he will try as much to not go into this guarantee as much as possible.

Last week, while participating in the International Monetary Fund (IMF) meeting, a total of 72 countries entered the fund’s program with special conditions due to their external debt problems. Now more than 10 countries are going to enter the program. He said that as of the third quarter of last year, our country was able to enter the IMF program as the 73rd country, but it did not enter the program because of decisive measures.

Moreover, he told, “The audit for the Development Bank was done by internationally renowned KPMG audit company. The 2022 balance went through the audit and was reported that it had no violation. This sets the basic conditions for foreign investors and Mongolian enterprises entering the foreign financial market to successfully manage their debts.”

After his statements, he was asked by journalists whether there is a possibility of salary and pension increase. Finance Minister B.Javkhlan said, “Due to the budgetary possibilities, wages and pensions were not increased during the coronavirus pandemic. Last year, the pension was increased to a certain extent firstly. Salary has not increased in the last three
years. For salary, it is more important to set the policy than increasing the amount. In the last decade, every industry has changed its laws and regulations and almost raced to raise wages. It became a matter of who can lobby hard. In other words, the unified salary policy of the civil service through the budget policy of the Ministry of Labor and Social Protection has been lost. Therefore, it is of the utmost importance to regulate the law and make changes to the salary policy of civil servants in a unified way so that the Ministry of Labor and Social Affairs can sustain it. This is a work of Minister Kh.Bulgantuya, who should pay special attention to.

Although the wage increasement has been delayed for the past three years, we will make adjustments by looking at the budget possibilities. It is too early to talk about salary increases through budget amendments. Budget adjustments are made when budget revenues are not met, or when expenses cannot be covered due to special circumstances.” According to him, the budget fulfilment is 100 percent meeting expectations.

Amarjargal Munkhbat