Mongolia Selected Macroeconomic Indicators January 2, 21 For further information, please contact: SSelenge@imf.org
2 2 27 2 29 21 211 212 213 213 Q1 Q2 Q3 Oct. Nov. Dec. Q Total US$-value 1,3 1,97 2,3 1, 2,99,17,3,273 9 1,21 1,7 32 31 12 1,17 Mining 1,1 1,3 2,129 1, 2,3,1,32 3, 7 1,19 9 3 3 37 1,7 Copper 3 12 3 2 771 9 39 99 29 19 27 7 12 9 29 Gold 27 23 3 17 113 122 31 3 93 11 Coal 11 1 3 2 2,273 1,92 1,122 29 333 21 97 12 11 33 Iron Ore 1 92 7 2 2 33 12 22 127 9 3 17 Crude oil 3 12 11 1 22 33 1 9 19 17 7 1 9 1 Zinc 17 1 122 13 13 131 119 3 32 1 13 9 3 Molybdenium 7 2 2 3 29 9 7 7 2 2 2 7 Fluor spar 9 9 9 13 3 1 21 2 7 19 Other mining 29 19 2 3 29 23 2 3 1 Non-mining 379 11 32 37 3 32 7 19 11 2 31 2 97 Textiles 23 227 192 21 21 23 23 13 11 7 1 11 12 3 Animals, animal products 27 32 9 2 2 3 1 7 12 Hides and skins 2 1 29 33 1 31 3 1 7 2 1 9 Other 1 71 12 27 2 31 11 1 17 2 (in thousands of tons, unless otherwise indicated) Export volumes Copper 3 7 9 7 7 1 13 1 1 11 Gold (tons) 11. 22.1 1.9.1 2.7 2. 7. 1. 2.2 2. 1.2.2.2 1. Coal 3,29,19 7,113 1,72 21,29 2,91 1,3 3,,39 3,97 2,2 2,1 2,2,97 Iron Ore 2 1,13 1,9 3,,2,1,72 1,122 2,7 1,92 1 1 739 2,3 Crude oil ('s of barrels) 12 1,9 1,939 2,71 2, 3,,2 92 1,1 1,39 3 3 712 1,79 Zinc 133 13 11 12 121 11 131 2 3 21 1 9 1 33 Molybdenium 3.2.1.7..2.3 1.1 1 1.3.3. 1. Fluor spar 3 39 31 7 29 33 7 112 29.3 2.9 27 (annual change, in percent) Export volumes Copper - 1-3 1 13-2 2 7 3 3 2 Gold 91-1 -3-7 171 1 3 37 2-33 - 33 Coal 2 71 13 27-2 -12 1-1 -2-1 11 Iron Ore 321 123 3 11-2 22 3 19 12 1 1 Crude oil 3 3 7 23 7 31 17 3 111 2 Zinc 1-21 1 17-7 3 3-2 -21 - -3-32 Molybdenium 2 3-2 -13 2-7 -9-2 -2-17 Fluor spar -3-1 29-21 -2-33 -1-31 -29-12 -2 Implied prices Table 1. Mongolia: Exports (in millions of U.S. dollars) (annual change, in percent) Copper 7-23 -13-11 - 3 1 Gold 3 2 2-7 3-1 - 12-31 -27-7 Coal 2-3 22 12-1 -33-2 -22-2 - -1-2 -32 Iron Ore 33-31 7 9 17 33-9 7 19-3 Crude oil -3 2 32 - - -2 12 11 9 9 9 Zinc -1-2 3-21 -2-7 -22-7 -2-2 Molybdenium -1-3 2-2 -17-1 -2-2 -7-11 -23-1 Fluor spar 3-1 1 3 2 3 1 1-1 - -1 - -9 (weighted average annual change, in percent) Mining export price 12-23 37 9-11 -13-1 -11-12 -22 - -12-13 Mining export volume 2 1 21 1 3 3-12 21 7 1 17 1 Source: National Statistics Office Mongolia; and IMF staff calculations.
3 Table 2. Mongolia: Imports of Oil and Cars and Trucks 27 2 29 21 211 212 213 213 213 213 213 Q1 Q2 Q3 Q Oil imports (value, in US$m) 2 7 3 1,12 1,3 1,32 313 29 33 37 Gasoline 239 31 223 229 3 7 92 119 97 132 Diesel 271 272 39 72 19 1 29 1 237 29 Other 32 3 13 1 32 7 9 12 13 19 Oil imports (volumes, in 's of tons) 71 33 7 1, 1,1 1,19 21 29 323 32 Gasoline 3 3 323 2 32 39 3 7 1 7 11 Diesel 3 2 1 99 7 71 773 17 13 219 23 Other 7 3 19 21 32 1 9 11 1 Volume change (year-on-year, in percent) Total imports 7-9 7 2 1-1 12-11 3 Gasoline -12-12 1 2-2 -3 97-2 Diesel 11-3 21 3 11-13 -7 Other -1-11 2 3 19 39 - Price change (year on year, in percent) Total imports -3 19 3 7-2 -2-1 -1 Gasoline 3-3 1 3 13-3 - -7-9 Diesel - 21 3 1-2 2 - Other 7-32 1 3 1 2 11-1 -3 Vehicle imports (value, in US$m) 1 39 131 373 1,3 3 1 2 19 19 Cars 11 19 71 1 7 3 373 7 121 1 7 Trucks 119 9 2 2 37 2 13 3 39 Vehicle imports (number) 3,2,99 1,217 3,99 2,33,37 2,7 12,1 2,9 1,22 113 Cars 22,1 3,2 11, 2,37 7,,3,79,93 13,9 13,2 39 Trucks 13,11 1,73,9 12,221 2,3 22,3 17,99 3,97,133,97 29 Average price per vehicle (in US$) Cars,1,927,11,232 7,77 9,2,3,2,77 7,7,377 Trucks,132,9 12,993 17,9 23,29 1,19 17, 2,9 23,29,7 13,2 Volume change (year-on-year, in percent) All vehicles -71 13 11-1 -9-2 2 - -2 Cars 7-7 12 11-19 - -2 32-1 -21 Trucks 3-7 1 13-1 -2-2 1-22 - Price change (year on year, in percent) All vehicles 2 7 2 29-3 -11-9 -7-2 - Cars 2 2 2 19-1 -11-22 -9 7 Trucks 97 31 37-22 - - 1-7 -9 Source: National Statistics Office Mongolia; and IMF staff calculations. Table 3. Mongolia: Imports and exports oil (in millions of US$s) 27 2 29 21 211 212 213 Oil exports 3 12 11 1 22 33 1 Oil imports 2 7 3 1,12 1,3 1,32 Net oil exports - -7-392 - - -1, - Source: National Statistics Office Mongolia; and IMF staff calculations.
Jan- May- Sep- Jan-9 May-9 Sep-9 Jan-1 May-1 Sep-1 May-11 May-12 May-13 Jan-1 2Q1 2Q2 2Q3 2Q 29Q1 29Q2 29Q3 29Q 21Q1 21Q2 21Q3 21Q 211Q1 211Q2 211Q3 211Q 212Q1 212Q2 212Q3 212Q 213Q1 213Q2 213Q3 Mar- Jun- Sep- Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 21 22 23 2 2 2 27 2 29 21 211 212 Figure 1. Mongolia: Real Sector Developments The economy expanded by 11½ percent during the first nine months of 213 despite slowing exports and FDI inflows. The start of OT s open-pit mining is boosting industrial production. Mongolia s growth has been impressive... 2 1 1 - Real GDP growth rate: China vs. Mongolia (Year-on-year percent change) China Mongolia The economy expanded by 11.9 percent (y/y) in the third quarter of 213, led by mining and non-mining industry. 2 2 1 Real GDP Growth (Contribution and year-on-year percentage change, 2Q1-213Q3) Net taxes Mining industry Agriculture Services Non-mining industry GDP at market prices (y/y growth) 2 1 1-2 2 1 contributing to a decline in poverty. 3 3 2 2 1 1 Mongolia: Poverty Headcount (In percent) 21 211 212 National Urban Rural Source: Mongolian authorities. Industrial output rose 2 percent during the last quarter of 213 (y/y), aided by the start of OT production. 3 2 Industrial Production (12-month percentage change in 3mma, March 2-December 213) 3 2 1 1 1 1 - - -1-2 -3 Gross Industrial Output Non-Mineral Industrial Output Mineral Industrial Output -1-2 -3 Source: Mongolian authorities. International copper prices declined by percent in 213. 1,,,, 2, International copper price (U.S. dollars per metric ton, Jan. 1, 2-Jan. 2, 21) Structuralprices as per FSL 1/ Spot Rate (London Metal Exchange) Budget price (from 211: FSL-based structural price 1/) Price in amended budget 1,,,, 2, Sources: Mongolian authorities. The volume of coal exports declined 12 percent in 213. But exports expanded during the last quarter of the years. 12 1 2-2 - - Coal Export Volume (Change, in percent, January 211-December 213) volume growth (y/y, 3mma) volume growth (y/y, 12mma) 12 1 2-2 - - Sources: Bloomberg LP; Mongolian authorities; and IMF staff estimates. 1/ The structural price is the average of the past 12 years and projections for the current and subsequent 3 years.
Jan- Jul- Jan- Jul- Jan-7 Jul-7 Jan- Jul- Jan-9 Jul-9 Jan-1 Jul-1 Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Dec-7 Mar- Jun- Sep- Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Figure 2. Mongolia: Overview of Macroeconomic Developments Expansionary fiscal policy in 212 and 213 supported growth but also put pressure on inflation and the current account. The successful international bond issuance in late-212 boosted reserves. Strong demand growth in recent years may have outstripped the growth of Mongolia s production capacity.,,, 3, 2, 1, -1, -2, Output Gap Estimates (based on HP filter) Mineral Output Gap (in percent of mineral GDP, RHS) -3, Non-mineral Output Gap (in percent of Non-mineral GDP, RHS) -, GDP (in bil Tog, LHS) -, Potential GDP (in bil Tog, LHS) Output gap (in percent of GDP, RHS) -, 1992 199 199 199 2 22 2 2 2 21 212 1 1 1 12 1 2-2 - - - -1-12 -1-1 -1 Expansionary fiscal policy has been a key driver of inflation. - -1-1 -2-2 Non-mineral fiscal balance (in percent of non-mineral GDP) Non-mineral (NM) on-budget balance Larger NM deficit due to DBM spending 2 2 27 2 29 21 211 212 213 contributing to double-digit inflation. Inflation in Ulaanbaatar was 12.3 percent in December 213 (y/y). 3 2 1-1 Consumer Price Inflation (in percent, December 27-December 213) Non-food items (contribution to headline CPI) Food items (contribution to headline CPI) Headline CPI (y/y) Non-food CPI (y/y) Food CPI (y/y) It has also kept the current account significantly in deficit even as imports for the FDI-financed OT mine wound down. 1, - -1, -1, -2, -2, -3, -3, -, Current Account (In millions of U.S. dollars, 23-213) Transfers, net Income, net Goods and services, net Current account Current account (RHS, in percent of GDP) 23 2 2 2 27 2 29 21 211 212 213 3 2 1-1 1 - -1-1 -2-2 -3-3 - The real effective exchange rate appreciated through June. In recent months there has been a correction. 1 12 1 Exchange rates of the togrog (Index, 2=1, Jan. 2-Dec. 213; an increase is an appreciation) REER NEER 1 12 1 Chinggis bond proceeds raised reserves in late-212. Gross reserves amounted to US$2.2bn in December.,, 3, 3, 2, 2, 1, 1, Gross international reserves (In millions of U.S. dollars, December 2-December 213),, 3, 3, 2, 2, 1, 1, Source: Mongolian authorities.
Jan- Apr- Jul- Oct- Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Figure 3. Mongolia: Fiscal Developments Expansionary fiscal policy pushed the deficit (including operations of the Development Bank of Mongolia (DBM)) in excess of 1 percent of GDP in 212 and 213. Including DBM spending, the deficit reached 1.9 percent of GDP in 212 and 1. percent of GDP in 213. 2-2 - - - -1-12 Fiscal balance (in percent of GDP) On-budget overall balance Increase in deficit owing to DBM spending 2 2 27 2 29 21 211 212 213 Spending is about percent of non-mineral GDP. 7 3 2 1 The Chinggis bond and DBM bond raised public debt by US$2.1bn in 212. The togrog depreciation pushed up the domestic currency value of external debt in 213. 7 3 2 1 Non-Mineral Revenue and Expenditure (in percent of non-mineral GDP) Non-mineral revenue On-budget expenditure DBM spending 1/ 2 2 27 2 29 21 211 212 213 Public debt 1/ (in percent of GDP) Nominal public debt 2 2 27 2 29 21 211 212 213 Sources: Mongolian authorities; and IMF staff esimates. 7 3 2 1 The 212 and 213 non-mining deficit topped the 2 record. Fiscal policy has been pro-cyclical. The 213 budget deficit was limited to MNT 2 billion or 1. percent of GDP. But this excludes DBM spending. 1/ As noted in the recent press release, the public debt data refer to the nominal value of debt and include tax prepayments by mining companies and external borrowing by the central bank. By contrast, the authorities estimates of public debt follow the definitions in the Fiscal Stability Law. They are expressed in net present value terms and exclude BOM borrowing. - -1-1 -2-2 2-2 - - - Non-mineral fiscal balance (in percent of non-mineral GDP) Non-mineral (NM) on-budget balance Larger NM deficit due to DBM spending 2 2 27 2 29 21 211 212 213 Cyclically-adjusted fiscal balance (CAB) vs. Output gap (in percent of potential non-mineral GDP) 1 12 Annual change of non-min. GDP gap 1 Annual change of CAB (inverse) -1-1 2 2 27 2 29 21 211 212 213 1 2-2 - 2/ The cyclically adjusted fiscal balance is the overall balance net of cyclical effects. Cyclical effects are computed using country specific elasticities of aggregage revenue and expenditure series. In this case, the elasticity assumptions are 1 for revenue and for spending. Revenues and expenditure (excl. DBM, incl. carryover) (Twelve-month percentage change in 3mma, Jan. 2-Dec. 213) Revenue Expenditure 1 2-2 - 1 12 1 2-2 - - -
Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Jan-1 Jan- Jul- Jan-9 Jul-9 Jan-1 Jul-1 Jan- Apr- Jul- Oct- Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Dec-7 Mar- Jun- Sep- Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Dec-7 Mar- Jun- Sep- Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 7 Import growth remains subdued owing to the decline in FDI. Export growth remains weak, despite the start of operations of the OT open pit mine. 1 12 1 2-2 - - Exports Imports Figure. Mongolia: External Sector Developments The trade deficit continues to be large. Imports and Exports (Twelve-month percentage change in 3mma, Dec. 27-Dec. 213) 1 12 1 2-2 - - The 12-month trade deficit remains over US$2 billion., 7,,,, 3, 2, 1, Trade Balance (12-month rolling sums, in US$m, Dec. 27- Dec. 213) Trade balance (RHS, inverted scale) Exports (LHS) Imports (LHS) -, -, -, -3, -2, -1, Before the recent depreciation, the REER was appreciating more than in copper-producing peers (e.g. Chile and Peru). 1 1 13 12 11 1 Real Effective Exchange Rates (Index, 2=1; a rise denotes a real appreciation. Jan. -Dec. 13) Chile Lao P.D.R. Peru Mongolia 1 1 13 12 11 1 Amid overall relatively strong export performance, nonmineral exports have underperformed. Export performance relative to other Asian countries (2Q1=1, 3mma, sa, Jan. 2-Nov. 213) High-income countries Middle and low income countries 3 Mongolia: Non-mineral exports 3 3 Mongolia: Total exports 3 2 2 1 1 2 2 1 1 9 Source: IMF INS. 9 Sources: Haver Analytics; CEIC Data Company; and IMF staff estimates. Note: High-income countries include Australia, New Zealand, Japan, Korea, Singapore, and Taiwan; Middle- and low-income countries include Indonesia, Philippines; Sri Lanka, Vietnam, Bangladesh, and India. Mongolia s sovereign spread is now about 2 basis points wider than the average for emerging market economies. 7 3 2 1 JP Morgan EMBI Global Sovereign Spreads (in basis points, January 1, 212-January 2, 21) Mongolia Emerging mrkts. (EMEs) Vietnam Source: Bloomberg LP. Philippines Sri Lanka Mongolia spread over EMEs 7 3 2 1 Stock prices of 3 mining companies operating mostly in Mongolia (MMC, TRQ, South Gobi) slumped in 213. 1 1 12 1 2 Stock Prices for Mining Companies (Index, January 1, 211=1, Jan. 1, 2-Jan. 2, 21) Mong. Mining Corp. (MMC, in HK) Turquoise Hill (TRQ, in Toronto) South Gobi (in HK) Rio Tinto (London) Jan- Jan-9 Jan-1 Jan-1 Sources: Bloomberg LP.; and IMF staff estimates. Return since Jan.1, 213 (in percent) _ MMC (coal) -77 TRQ (copper) -39 South Gobi (coal) - Rio Tinto (diverse) - Copper price - 1 1 12 1 2
Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Jan-1 Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Jan-9 May-9 Sep-9 Jan-1 May-1 Sep-1 May-11 May-12 May-13 Dec-7 Mar- Jun- Sep- Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Dec-7 Mar- Jun- Sep- Dec- Mar-9 Jun-9 Sep-9 Dec-9 Mar-1 Jun-1 Sep-1 Dec-1 Figure. Mongolia: Monetary Developments Bank lending picked up rapidly through most of 213 but slowed somewhat in recent months. The growth of private sector credit decelerated in December but remains high. 1 12 1 2-2 - Bank Credit and Deposits (Quarter-on-quarter change, in percent (saar), Dec. 27-Dec. 213) Credit Deposits 1 12 1 2-2 - Banks loan-to-deposit ratio substantially exceeds the average for the past years. 1 13 12 11 1 9 7 Commercial Banks' Loan-To-Deposit (L/D) Ratio (December 27-December 213) -year average Headline Loan-To-Deposit Ratio 1 13 12 11 1 9 7 Banks are holding substantial overall excess reserves with the Bank of Mongolia, mostly in foreign currency. 1 9 7 3 2 1 Excess Reserves (June 29-December 2, 213) Excess reserves on togrog deposits (in MNT bn, LHS) Excess reserves on forex deposits (in MNT bn, LHS) Required reserve rate (in percent, RHS) Excess reserves (in percent of reserve money, RHS) 3 3 2 2 1 1 Bank lending rates on 1-year togrog loans averaged 1. percent in October. 2 2 1 1 Commercial banks' interest rates (Percent per annum, end-of-period, Jan. 29-Nov. 213) Headline CPI Lending rate (in togrog, 1 year) Lending rate (in US$, 1 year) Deposit rate (in togrog, average 1 year) Deposit rate (in US$, average 1 year) Spread on togrog lending and deposit rates 2 2 1 1 In three steps, the Bank of Mongolia s Monetary Policy Committee lowered the policy rate 27 bps, to 1. percent. 2, 1, 1, 1, 1,2 1, 2 Central Bank Bills (CBBs) (Jan. 1, 29-Jan. 2, 21) CBBs outstanding (in billions of togrogs, LHS) 7-day CBB rate (in percent, RHS) -day CBB rate (in percent, RHS) 2 1 1 New regulations to strengthen bank capitalization have been phased in amid low reported NPLs. 2 2 1 1 Bank Capitalization and Asset Quality (In percent, January 29-October 213) Nonperforming loans to total loans Bank capital to risk-weighted assets 2 1 1