FEAS Yearbook FEAS Yearbook 2009 | Page 102

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2009 MONGOLIAN STOCK EXCHANGE ECONOMIC AND POLITICAL DEVELOPMENTS GDP real growth accelerated over the 2nd quarter of 2008, reaching 11.3% over the last 12 months. The main engines of growth were services and agriculture, contributing 4.2 and 3.8 percentage points respectively to GDP growth. Although the direct contribution of mining to economic growth is small or even negative, this remains Mongolia’s main foreign exchange earner, with large export revenues from high world metals prices and sustained FDI flowing into the sector over the first half of the year. Copper prices fell recently on weak demand, especially from sagging global construction activity and higher inventories, with prices plunging sharply in early October on concerns about global growth. From August to early October, the total drop exceeded 40%. Wages and salaries are increasing in all parts of the economy and showed a rapid increase of 69% in the first semester of 2008 (year-on- year), and of 119% over the last 2 years. Public sector wages were increased by 129% over the same period. The share of wages and salaries in household incomes has increased rapidly, from 40% in the 3rd quarter of 2007 to 46% in the 2nd quarter of 2008. General Government budget For the preliminary result of 2008, total revenue and grants of General Government budget totaled 2156.4 billion togrogs, total expenditure and net lending 2462.0 billion togrogs and General Government budget overall balance was a deficit 305.7 billion togrogs, which were representing 35.2%, 40.2% and 5.0%of the GDP, respectively. Current revenue of General Government amounted to 2136.1 billion togrogs and current expenditure 1749.5 billion togrogs. The budget current balance was a surplus 386.6 billion togrogs. Compared to 2007, tax revenue increased by 25.7% or 386.6 billion togrogs, taxes on foreign trade increased by 47.2% or 48.4 billion togrogs, excise tax increased by 33.4% or 44.7 billion togrogs and value added tax increased by 33.9% or 90.0 billion togrogs, accordingly. Money, loan According to the report of the Bank of Mongolia, at the end of December of 2008 money supply (broad money or M2) increased by 4.4% or 99.6 billion togrogs over the November of 2008, reaching 2341.4 billion togrogs and decreased by 2.5% or 59.9 billion togrogs compared to December of 2007. At the end of November of 2008, the reverse assets reached to US$ 606.3 million which equals with the import needs of 8.7 weeks or 2.2 months. The nominal rate of togrog against US.dollar is 1267.51 togrog at the end of December 2008. Compared with December of 2007, rate of togrog weaken by 8.3%. Consumer price index In December 2008, the national consumer prices increased by 0.04% compared with previous month and by 22.1% from the end of previous year. CPI increase by 22.1% was higher 3.6 times than the objective in the Main Guidelines of Socio-Economic Development of Mongolia for 2008 which CPI shall be kept at 6.0%. Annual average CPI for 2008 was 28.0%, the highest growth over the last decade. External trade For the preliminary estimates of 2008, total external trade turnover equaled US$ 6155.1 million. of which exports US$ 2539.3 million and imports US$ 3615.8 million. Total external trade balance turned a deficit of US$ 1076.5 million. The deficit is increased by US$ 855.6 million compared with the 2007. External trade deficit has been influenced by the import growth of products and materials of fuels which is 36.3 point higher than export growth. As compared with the 2007, total external trade turnover increased by 49.4%, exports by 30.3% and imports by 66.6% respectively. In the Main Guidelines of Socio- Economic Development 2008, there have special goals such as to improve external trade surplus, to raise net official reserves. But the total external trade balance deficit was US$ 1076.5 million and it is increased by US$ 855.6 million or 4.9 times compared with the 2007.* * National Statistical Office (www.nso.mn) World Bank Country Report (http://go.worldbank.org/D8H9DQNLZ0) Key Information Contacts Parliament of Mongolia www.parl.gov.mn State Property Commission www.spc.gov.mn Ministry of Finance www.mof.pmis.gov.mn Financial Regulatory Commission www.frc.mn The Central Bank of Mongolia www.mongolbank.mn Mongolian Chamber of Commerce & Industry www.mongolchamber.mn National Statistical Office of Mongolia www.nso.mn Ministry of Foreign Affairs www.mfa.gov.mn 2007-ORIGINS OF GROSS DOMESTIC PRODUCT (%) (a) Industry Mining Agriculture Transport & communications Trade 27.4 2007-COMPONENTS OF GROSS DOMESTIC PRODUCT (%) (a) Gross capital formation Private consumption Government consumption Gross fixed capital formation Net exports of goods & services 50 48.9 37.6 40 20.6 35.7 34.9 30 20 15.2 10 9.1 0 -1.7 7.6 PAGE 100 -10 * World Bank reports