EPCRC: MONTHLY MACROECONOMIC OVERVIEW
MAIN INDICATORS: GDP, STATE BUDGET, FOREIGN TRADE, EXCHANGE RATE, INFLATION
The quarterly economic growth reached 16.7%
GDP reached MNT 2.3 trillion at current price and MNT 980 billion at 2005 price in the first quarter of 2012, up by 30% at current price and 16.7% at 2005 price compared to same period of the previous year.
A growth of 16.7% is higher by 1.7 times than first quarter of the previous year.
Increase in expenditure of state budget was mainly due to growth of subsidies and transfers
In the first 4 months of 2012, total equilibrated revenue of state budget increased by 22.3% and expenditure increased by 31.7% compared to same period of the previous year, representing a deficit of MNT 48 billion.
The expansion of revenue was mainly due to 42% increase in VAT, 56% increase in social insurance premium income, 34% increase in corporation income tax and 60% increase in personal income tax. The growth in spending supported by 16% increase in subsidies and transfers and 28% increase in wages and salaries.
Imports of fuel increased by 2 times, while exports of coal increased by 50%
Total turnover of foreign trade reached USD 3.4 billion, showing increases of 23% compared to same period of the previous year. It depends on 11% increase in exports and 31% increase in imports. Foreign trade balance showed a deficit of USD 0.8 billion.
Exports supported by shipments of mineral products, specially coal. Increase in imports was mainly due to imports of fuel and cars. Copper concentrate exports and heavy machines imports decreased.
MNT exchange rate is appreciating against the USD
MNT exchange rate appreciated against the USD by 1.5% compared to previous month and 4.4% compared to beginning of the current year. However MNT depreciated by 7.6% against USD compared to same period of the previous year.
Total amount of foreign currency reserves increased by 1.7% compared to previous month and 24.4% compared to same period of previous year.
Decrease in price of USD by MNT depends on large supply of USD and wool season.
Inflation is increasing ...
Inflation rate is increasing still more and reached 16% nationwide.
The increase in average rates of prices was mainly due to 26.5% increase in food price, 20.4% increase in restaurants and hotels.
Increase of inflation supported by supply problems, especially meat supply problems.
FINANCIAL SECTOR: MONEY SUPPLY, DEPOSITS, LOANS
Money supply reached MNT 6.4 trillion
Money supply or M2 increased by 18.9% compared to same period of the previous year and 4.1% compared to previous month. The currency issued in circulation increased by
12.8% in last one year and it reaches 11.1% of total money supply.
Expansion of the money supply was mainly due to increase of current accounts and deposits by MNT.
Deposits in MNT rise faster than foreign currency deposits
Total amount of deposits increased by 23.5% compared to same period of the previous year and 6.3% compared to previous month.
Deposits in MNT which hold 75% of total deposits increased by 26.1% compared to same period of the previous year, while deposits in foreign currency increased by 16.3%.
96% of total deposits belong to individuals.
Loans outstanding is increasing and share of nonperforming loans is decreasing
Loans outstanding increased by 2.7% compared to previous month and 49% compared to same period of the previous year. Share of non-performing loans decreased and reached 5.3% of total amount of loans.
Yearly average interest rates of loans increased by 2% for MNT and decreased by 0.5% for foreign currency compared to previous month.
Monthly highlights
> Bank of Mongolia decided to increase the policy rate by 0.5% to 13.25% and the required reserve rate by one percent to 12 percent.
> Parliament of Mongolia resolved to distribute additional 536 shares to every citizen, register and allocate people who want to receive the amount as cash of MNT 1 million, and allocate MNT 1 million cash to elder and disabled citizens in three parts: in April, May and June.
> NSO and World Bank announced that poverty rate in Mongolia stands at 29.8% which is 9.4% points less than in 2010 according to their joint estimation.
> ADB "Asian Development Outlook 2012" report published. It forecasts the Mongolian economy to expand 15% in 2012 and accelerate further to 17.5% in 2013.
Summary
GDP growth reached 16.7% in the first quarter of 2012 and it is higher by 1.7 times than same period of the previous year. It shows that economic growth will be high in this year.
Expansion of the budget is continuing and increase in revenue was mainly due to increases in tax revenue and growth in spending supported by an increase in subsidies and transfers, wages and salaries. While budget expands, there are also a deficit of foreign trade and high inflation rate. It shows that economy is overheating.
Tendency of appreciation of MNT exchange rate against USD is due to wool season and intervention of Bank of Mongolia. The BoM decided to increase the policy rate again to try to limit inflation increases supported by supply problems, especially meat supply problem. Inflation reached 16% nationwide and policy rate increased by 0,5% to 13,25%. But it leads the way to high interest rate of loans. Changes in policy rate affect commercial banks' interest rate of loans after 2-3 quarters and BoM explains that it is needed to tighten the monetary policy and weaken inflationary pressures.
However budget expansion and allocation of cash lead to high inflation also. The Parliament of Mongolia decided to allocate MNT 1 million cash to elder and disabled citizens in the second quarter and it amounts MNT 334 billion which is equal to 50% of currency in circulation.
The quarterly economic growth reached 16.7%
GDP reached MNT 2.3 trillion at current price and MNT 980 billion at 2005 price in the first quarter of 2012, up by 30% at current price and 16.7% at 2005 price compared to same period of the previous year.
A growth of 16.7% is higher by 1.7 times than first quarter of the previous year.
Increase in expenditure of state budget was mainly due to growth of subsidies and transfers
In the first 4 months of 2012, total equilibrated revenue of state budget increased by 22.3% and expenditure increased by 31.7% compared to same period of the previous year, representing a deficit of MNT 48 billion.
The expansion of revenue was mainly due to 42% increase in VAT, 56% increase in social insurance premium income, 34% increase in corporation income tax and 60% increase in personal income tax. The growth in spending supported by 16% increase in subsidies and transfers and 28% increase in wages and salaries.
Imports of fuel increased by 2 times, while exports of coal increased by 50%
Total turnover of foreign trade reached USD 3.4 billion, showing increases of 23% compared to same period of the previous year. It depends on 11% increase in exports and 31% increase in imports. Foreign trade balance showed a deficit of USD 0.8 billion.
Exports supported by shipments of mineral products, specially coal. Increase in imports was mainly due to imports of fuel and cars. Copper concentrate exports and heavy machines imports decreased.
MNT exchange rate is appreciating against the USD
MNT exchange rate appreciated against the USD by 1.5% compared to previous month and 4.4% compared to beginning of the current year. However MNT depreciated by 7.6% against USD compared to same period of the previous year.
Total amount of foreign currency reserves increased by 1.7% compared to previous month and 24.4% compared to same period of previous year.
Decrease in price of USD by MNT depends on large supply of USD and wool season.
Inflation is increasing ...
Inflation rate is increasing still more and reached 16% nationwide.
The increase in average rates of prices was mainly due to 26.5% increase in food price, 20.4% increase in restaurants and hotels.
Increase of inflation supported by supply problems, especially meat supply problems.
FINANCIAL SECTOR: MONEY SUPPLY, DEPOSITS, LOANS
Money supply reached MNT 6.4 trillion
Money supply or M2 increased by 18.9% compared to same period of the previous year and 4.1% compared to previous month. The currency issued in circulation increased by
12.8% in last one year and it reaches 11.1% of total money supply.
Expansion of the money supply was mainly due to increase of current accounts and deposits by MNT.
Deposits in MNT rise faster than foreign currency deposits
Total amount of deposits increased by 23.5% compared to same period of the previous year and 6.3% compared to previous month.
Deposits in MNT which hold 75% of total deposits increased by 26.1% compared to same period of the previous year, while deposits in foreign currency increased by 16.3%.
96% of total deposits belong to individuals.
Loans outstanding is increasing and share of nonperforming loans is decreasing
Loans outstanding increased by 2.7% compared to previous month and 49% compared to same period of the previous year. Share of non-performing loans decreased and reached 5.3% of total amount of loans.
Yearly average interest rates of loans increased by 2% for MNT and decreased by 0.5% for foreign currency compared to previous month.
Monthly highlights
> Bank of Mongolia decided to increase the policy rate by 0.5% to 13.25% and the required reserve rate by one percent to 12 percent.
> Parliament of Mongolia resolved to distribute additional 536 shares to every citizen, register and allocate people who want to receive the amount as cash of MNT 1 million, and allocate MNT 1 million cash to elder and disabled citizens in three parts: in April, May and June.
> NSO and World Bank announced that poverty rate in Mongolia stands at 29.8% which is 9.4% points less than in 2010 according to their joint estimation.
> ADB "Asian Development Outlook 2012" report published. It forecasts the Mongolian economy to expand 15% in 2012 and accelerate further to 17.5% in 2013.
Summary
GDP growth reached 16.7% in the first quarter of 2012 and it is higher by 1.7 times than same period of the previous year. It shows that economic growth will be high in this year.
Expansion of the budget is continuing and increase in revenue was mainly due to increases in tax revenue and growth in spending supported by an increase in subsidies and transfers, wages and salaries. While budget expands, there are also a deficit of foreign trade and high inflation rate. It shows that economy is overheating.
Tendency of appreciation of MNT exchange rate against USD is due to wool season and intervention of Bank of Mongolia. The BoM decided to increase the policy rate again to try to limit inflation increases supported by supply problems, especially meat supply problem. Inflation reached 16% nationwide and policy rate increased by 0,5% to 13,25%. But it leads the way to high interest rate of loans. Changes in policy rate affect commercial banks' interest rate of loans after 2-3 quarters and BoM explains that it is needed to tighten the monetary policy and weaken inflationary pressures.
However budget expansion and allocation of cash lead to high inflation also. The Parliament of Mongolia decided to allocate MNT 1 million cash to elder and disabled citizens in the second quarter and it amounts MNT 334 billion which is equal to 50% of currency in circulation.
Comments
Post a Comment