Working group of international monetary fund evaluated on Mongolian economic growth, change, prospect and finance policy. As IMF evaluated, Mongolian economy has positive influence in the mid time because of rich useful minerals and exists between two economically growing countries. But mentioned that economic growth is leading new risks.
Working group leader Roger Kronenberg and Won Jong, permanent representative of IMF, made information. Roger Kronenberg informed that, as economic growth increases, inflation is influencing to the stability of macro economy. Even though parliament approved to hold inflation in a digit on monetary policy, but it was 17.5 per cent in last January.
The main reason of it is salary of state officers, social welfare expenditure, bank loan and price growth of import goods. The working group advised to government that no need to spend as you planned and no need to implement any new program. They answered journalists’ questions.
You advised not to implement new program. But government is going to distribute money as a “Grant of the Nation”?
Government need to improve the social welfare policy. Useful mineral are not restorable wealth. Not to terminate only by distribution, but need investment for future. Also need to always think about what to do when price is down.
Do we have chance to decrease inflation to a digit?
Government can eliminate budget deficit by reducing inefficient expenditure. Besides it, we can hold inflation within 9 per cent at the end of this year by making strong the bank loan. Also currency exchange needs to become flexible. Situation will not get improved if government doesn’t make strong budgetary and monetary policy.
You are speaking to make strong the loan. Mongolbank is guiding to constantly decrease interest rates. Is that wrong?
-Inflation was 6 to 8 per cent when bank loan was high. It’s not wrong to reduce in that time. But need to make strong the interest rate when inflation is increased.