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2013 growth is officially forecasted at 19%

According to leading Mongolian news portal news.mn on May 22,2012 (http://politics.news.mn/content/108587.shtml), Parliament of Mongolia has approved main directions of Mongolia’s social and economic development in 2013

  • Keeping continuity of action program policy of Government of 2008-2012
  • New Government and Parliament can clarify it further according to new policy and election program
  • Draft main directions include 26 goals and 171 measures, will require funding of 4,4 trillion MNT(3.33 billion USD – Frontier Securities)
  • For 2013 real GDP growth is forecasted at 19% and GDP at current prices is forecasted to reach 19 trillion MNT(14 billion USD – Frontier Securities), per capita GDP – 4900 USD, official net reserves 4,1 billion USD, population to increase 2% , unemployment to be kept at 6,1%
  • Exchange rate is forecasted at 1326,4 MNT ; there will be tendency of MNT appreciation under influence of foreign exchange inflows
  • 38% of investment is to be supplied from domestic sources
  • MSE is work by principles of LSE
  • Budget deficit is not to go above 2% of GDP
  • In a future, policy rate of Bank of Mongolia is to be reduced, also not only to target inflation but to develop economy based on banking balance
  • Budget, trade and payments balances are to be positive and macroeconomic stability kept, however, there will be a risk of increasing inflation following rapid rise of demand and inflation is to be kept in single digits therefore policy to support supply such measures as industrialization, infrastructure development, forming meat and fuel reserves, agricultural exchange, SME support, petroleum processing, meat ,dairy and construction materials plants, vegetables farming will be implemented
  • Directions are closely prepared with 2013 budget framework declaration
  • Major mining projects and extraction are to start at 2013, investments into major infrastructure development to increase as weak infrastructure is most negative factor for Mongolia’s competitiveness, major infrastructure projects in 2013 would include
  1. oMajority of TT-Sainshand railroad
  2. o30% of TT-Gashuunsukhait and Nariin Sukhait-Shivee Khuren railroads(Frontier Securities: thoseare related to MMC(HK:975) and SouthGobi(TSE:SGQ;HK:1878)
  3. oWork is to start on 400 MWt power planed based on TT deposit, Mandalgobi-TT-OT 220kV overhead powerline and substation, Choir-Tsagaansuvraga 220 kV powerline and substation
  4. o50 MWt windparks in Tuv province and Sainshand
  5. o300-350 MWt hydro plant at Selenge river
  6. o1400 km of paved roads, expansion and improvement of 100 km paved road in Ulaanbaatar
  7. oStart of infrastructure works at Sainshand heavy industrial hub
  • Work on Economic Partnership Agreement with Japan and transparency section of FTA with the USA will continue

Dale Choi | Chief Investment Strategist | Frontier Securities | #705, Blue Sky Tower, Peace Avenue 17, 1st khoroo, Sukhbaatar district, Ulaanbaatar, Mongolia| Office: +976 7011999 | Mobile: +976.99103371 | Email: This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it.