1

ApprovedthegovernmentActionPlanfor20162020
Action planconsistsof5policymeasures.
1. Policy toovercome economicdifficulties,.
Aimstoovercomeeconomicdifficultiesintheshortrun,attractdomesticand
foreigninvestmentandtorelieveeconomicpressureoncitizensand
domesticbusinessbroughtonbydebt,bycreatingamorefavorablebusiness
environment,

2. Policytosupportthesustainableeconomicgrowth,
Aimstosupportthedomesticproducersinordertobuiltthediversified
economicbase,andincreaseGNI;(lightindustry,agricultureindustry
etc.)
3. Socialwelfarepolicy,
Aimstoincreasehouseholdincome,andsupportsonhealth,educations
sectors,.
4. Environmentandgreendevelopmentpolicy,
Maintaintheecosystem,protectthenaturalresourcesanditsshortage,
supporttheenvironmentallyfriendlyinclusivegrowth.
5. Policytoincreasegovernance.

Fm speechfordomesticaudience,politicalmandateforfiscalconsolidation
Revenue=>mostconservative
DBMrepaymentstoberefinancedbysovereignbonds,2017=>5.6%ofGDP,
2018=>3.1%,2018=>1.8%
Foreignaiddisbursement,2017=>7.1%ofGDP,2018=>8.8%,2018=>7.3%
Onaverage,foreignaiddisbursementis%ofGDP/FiscalExpenditure

KeyDriversAmount(bln MNT)
1.DeclineofCommoditypriceandexport: 220.3
Copperpricedeclinedby11percent
Declineofrevenuefromroyalty.
2. DeclineofImport:485.1
Asthefirsthalfof2016,importdeclinedbyaround19percentcompareto
previousyear
Forecastedimportisexpectedtofallabout27percentintheendof2016.
5.Domesticeconomicsituation: 323.0
DeclineofrealEconomicgrowth
Revenueexpectedtofallinrelationtodecliningtheconsumptionand
profitability
levelofbusinesses.
4.Nontaxrevenue:641.3
Revenueexpectedtofallinrelationtonotreachingthecompletionlevelof
projectswhicharefinancedbygrantofPeoplesRepublicofChina.
DeclineofrevenuefromprivatizationofSOEs.
DeclineofdividendincomefromSOEs

Capitalinvestment(MNTbn):
2017
759.5
2016amend 1505.8(duetotheoffbudget expenditures,oneoffactivities
consolidationtothebudget)
2016
1035.8
Maincapital investmentfor20162017areonlyforhealthandeducationsector
investments.

SocialWelfare
Salary

23.32%

20.17%
OtherExpenses
18.82%
BudgetInvestment
10.24%
Concession/BTProjectRepayments
DisbursementofForeignLoanandGrant
10.01%
InterestPayments
15.81%

2016
20.55%
21.11%

2016tod
23.60%
17.58%

17.33%

24.89%

17.16%

17.86%

0.00%
9.17%

0.73%
7.59%

11.92%

10.81%

2017

1.35%

10

Gold purchase:
This is a dramatic increase compare to previous years (15.1 metric ton in 2015 and 12.7
metric tons in 2014) data illustrated. We expect the around same amount of purchases
for the year of 2017 and 2018.

11

12

Monetarypolicyin2017shallbedirectedtowardsovercomingthecurrenteconomic
downturnwiththeleastamountofconsequences,stabilizingtheeconomyinashort
periodoftimeandfacilitatinganenvironmentofsustainablegrowthinthemedium
andlongterm.
ThefollowingarestatedintheMonetaryPolicyGuidelinesdraftfor2017topromote
sustainablegrowthandeconomicdiversification:
Byensuringlowandstableinflation,theBankofMongoliaisfacilitatingan
environmentofsustainablegrowthandsupportingthedevelopmentoffinancialsector.
Byadheringtoaflexibleexchangerateregimeinlinewithmacroeconomic
fundamentals,theBankofMongoliaispromotingdomesticproduction,exportsand
economiccompetitivenessinthemediumtolongterm.
TheBankofMongolia,incooperationwiththeGovernmentandtheFinancial
RegulatoryCommitteewouldbetakingmeasurestodevelopmultipillaredstructureof
financialmarketandimprovetheinclusionoffinancialintermediation.

13

14

15

16

Initialplan wastobediscussedlateSeptember,butgovernmentprefersbefore
that,duringParliamentextraordinarysession

17

18

19

20

21

22

23

OnlytwoclausesofFSLamended:
1.Debtceilingrevisedasshowninachartintheleftside,
2.Deficitlimitrevisedasshowninachartintherightside.

24

Thecountryislookingtomaintainitsdebtlevel(inabsoluteterms)at
sustainablelevel,sothatwithincreaseinGDP,debt/GDPratiowoulddecline.
70%debt/GDPratioisthecountrystargetfor2020and60%for2021.
DBMs$580mn,duein2017.
Currently,DBMhassufficientliquidity.AstheDBMloanisguaranteedbythe
GoM,ithasreflectedinthebudgetasanobligationofGoM,inordertomake
surethepaymentwillbecovered.

25

26

27

28

29

30

31