Likely economic adjustment in 2014 as a result of growing external and internal economic imbalances
- Three years of growth-oriented economic policies have led to large economic imbalances.
- In 2014, the economy is undergoing an adjustment in response to the large external and internal imbalances.
Increasing short-term economic risks amidst the large balance of payments pressure and deteriorating financial soundness.
- Large balance of payments pressure will likely persist in 2014.
- Asset quality of banking sector is deteriorating.
Need for structural shift in the economic policy framework to restore economic and financial stability.
- Monetary policy needs to be tightened to address high inflation.
- Financial sector policy should focus on ensuring financial stability.
- Fiscal policy should adhere to the fiscal discipline imposed by the Fiscal Stability Law (FSL).
Time to think about managing resource revenues more effectively
- Mongolia has not accumulated savings from its resource revenues during the past high-growth period.