Wednesday 18 November 2009

11/18 Mongolia Business and Mongolian Daily Business News » Finance

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Mongolian General Budget of 2010 Update (1)
November 17, 2009 at 4:08 am

According to the Mongolian General Budget Projection in 2010, budget income is ₮2,306.0 billion, expense is ₮2,664.6 billion and total deficit is ₮358.6 billion, equal to 5% of GDP. Budget total deficit is ₮433.7 billion. This deficit is planned to be covered within the program "Standby", ₮92.2 billion from donors, ₮109.2 billion from foreign loan and project loan, ₮141.5 billion from Mongolia Development Fund (remaining of a fund for eliminating the critical situation due to force majeur effects). The remaining deficit of ₮82.1 billion will be covered by the Government Bond issuance. Investment and projects of ₮452.5 billion is planned to support real sectors of economy in 2010. Infrastructure takes 45% of total budget investment and society building takes 28%.

Since the implementation of "Standby" program in April 2009, the main index of the Mongolian economy has improved and some early signs of recovery can be seen in certain sectors. Total deficit of General Budget reached ₮332.5 billion in September 30 2009. ₮164.2 billion of it has zero funding resource and it was covered by the loan of donor countries and organization according to the Standby program. In the future, a draft law on "Budget Stability" is being developed to improve budget structure and sustain mid to long term budget stability. It will also cover laws on "General Budget" and "Management and Financing of the Budget Organizations" in order to provide complex approach to the fundamental issues of reforming budget structure.
Situation was difficult before the program implementation. Foreign currency reserve was running out and banking sectors were losing trust. Therefore, budget financing was in difficulty. It was due to the copper price slump and pursuance of an old fashioned policy.

 

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