Lee, TaehyunShiilegmaa, AltantsetsegBatsuuri, Davaadalai2015-04-282015-04-282014-12https://hdl.handle.net/10986/21802In 2014, economic growth slowed as it began to adjust to unsustainable economic imbalances. Real GDP growth softened to 7 percent in the first 9 months, from 12.8 percent in the previous year. Despite strong mining production growth of 26 percent, the growth of the non-mining sector of the economy dropped to 2 percent in the third quarter from 17.4 percent a year ago. Investment sharply fell amidst declining FDI and weakening business prospects. Consumption remains relatively strong but is also gradually softening. The growth effect from stimulus measures of the last year is also wearing off in 2014 as large liquidity support from the central bank cannot be sustained in the wake of high inflation and external vulnerabilities. The current account deficit is narrowing significantly to around 11 percent of GDP from almost 30 percent in the previous three years, due to import contraction over 16 percent and stronger copper exports. However, a significant external financing gap continues amidst declining foreign investment, reducing internal reserves to less than three months import cover. Inflation remains in double digits after a strong credit boom in 2014 and continuous currency depreciation. Economic growth is likely to continue to soften in 2015 as the economy remains under pressure from the external imbalance and high inflation. To help achieve the goal of the new Solutions-oriented Government to overcome economic challenges and build a sound economic management system, the following policy actions are recommended to be considered in the economic policy framework: (1) Consolidate the off-budget spending made through the DBM into the budget; (2) prepare a credible and realistic fiscal consolidation plan to reduce the deficit; (3) monetary policy should be tightened; (4) further quasi-fiscal activities need to be avoided; and (5) the exchange rate should be left flexible.en-USCC BY 3.0 IGOACCESS TO INFORMATIONACCOUNTINGAPRASSET QUALITYASSET RATIOBACKED SECURITIESBALANCE OF PAYMENTBALANCE OF PAYMENTSBALANCE SHEETBANK ACCOUNTSBANK ASSETBANK ASSET QUALITYBANK ASSETSBANK CREDITBANK DEPOSITBANK FINANCINGBANK LIABILITIESBANK LIABILITYBANK LOANBANK LOANSBANK MARKETBANK POLICYBANK RATEBANKING SECTORBANKING SYSTEMBASIS POINTSBONDBOND ISSUANCEBROAD MONEYBUDGET BALANCEBUDGET DEFICITBUDGET DEFICITSBUSINESS ­ ACCOUNTINGCAPITAL ADEQUACYCAPITAL FORMATIONCAPITAL INFLOWCENTRAL BANKCENTRAL BANK BILLCENTRAL BANK BILLSCENTRAL BANK CREDITCOMMERCIAL BANKCOMMERCIAL BANKSCOMMERCIAL DEBTCOMMERCIAL FINANCINGCOMMERCIAL MORTGAGECOMMERCIAL TERMCOMMERCIAL TERMSCOMMODITY MARKETSCOMMODITY PRICECONCESSIONSCONSUMPTION GOODSCONSUMPTION GROWTHCREDIBILITYCREDIT BOOMCREDIT EXPANSIONSCREDIT GROWTHCREDIT QUALITYCREDIT RISKSCREDITORSCREDITSCURRENCYCURRENCY DEPRECIATIONCURRENCY MISMATCHCURRENCY SWAPCURRENT ACCOUNTCURRENT ACCOUNT BALANCECURRENT ACCOUNT DEFICITCURRENT ACCOUNT DEFICITSCURRENT DEBTDEBT BURDENDEBT FINANCINGDEBT GUARANTEEDEBT LIABILITIESDEBT MANAGEMENTDEBT REPAYMENTDEBT REPAYMENT SCHEDULEDEBT REPAYMENTSDEBT SERVICEDEBT-SERVICEDEFICITSDEPOSITDEPOSITSDEVELOPING COUNTRIESDEVELOPMENT BANKDIVIDENDSDOMESTIC CREDITDOMESTIC CURRENCYECONOMIC DEVELOPMENTSECONOMIC GROWTHECONOMIC IMBALANCESECONOMIC POLICIESECONOMIC STABILITYEQUIPMENTESTATEEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORT GROWTHEXTERNAL BORROWINGEXTERNAL BORROWINGSEXTERNAL DEBTEXTERNAL FINANCINGEXTERNAL POSITIONFINANCIAL ACCOUNTFINANCIAL INFORMATIONFINANCIAL PERFORMANCEFINANCIAL RESOURCEFINANCIAL VULNERABILITIESFISCAL BURDENFISCAL CAPACITYFISCAL DEFICITFISCAL POLICYFIXED INVESTMENTFLOATING EXCHANGE RATEFOREIGN CAPITALFOREIGN CURRENCYFOREIGN CURRENCY LOANSFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVESFOREIGN INVESTMENTFOREIGN INVESTORSFOREIGN LIABILITIESGOVERNMENT BONDGOVERNMENT BOND YIELDSGOVERNMENT BONDSGOVERNMENT BUDGETGOVERNMENT DEBTGOVERNMENT GUARANTEEHIGH INFLATIONHOLDINGSHUMAN DEVELOPMENTIMBALANCEIMPORTIMPORT COMPRESSIONIMPORTSIMPORTS OF CONSUMPTIONINFLATIONINFLATION RATEINFLATIONARY PRESSUREINFORMATION SYSTEMINSURANCEINTEREST PAYMENTINTEREST PAYMENTSINTEREST RATEINTERNATIONAL RESERVESINTERNATIONAL STANDARDSINVESTMENT INCOMEISSUANCELABOR FORCELABOR MARKETLENDING EXPOSURELIABILITYLIABILITY COMPOSITIONLIQUID ASSETSLIQUIDITYLIQUIDITY SUPPORTLOANLOAN APPLICATIONSLOAN DEMANDLOAN QUALITIESLOAN QUALITYLOAN RATIOLOCAL GOVERNMENTLONG-TERM LOANMACROECONOMIC POLICYMARKET DATAMATURITYMONETARY AUTHORITIESMONETARY CONDITIONSMONETARY POLICYMONEY SUPPLYMORAL HAZARDMORTGAGEMORTGAGE LOANMORTGAGE LOANSMORTGAGESNON-PERFORMING LOANNON-PERFORMING LOANSNONPERFORMING LOANSNPLOUTSTANDING LOANSPENSIONPENSION SYSTEMPENSIONSPRICE INFLATIONPRIVATE LOANSPRIVATE SECTOR CREDITPROCUREMENTPROCUREMENT PLANPRUDENTIAL REGULATIONPRUDENTIAL REGULATIONSPRUDENTIAL SUPERVISIONPUBLIC DEBTPUBLIC DISCLOSUREPUBLIC EXTERNAL DEBTPUBLIC INFORMATIONPUBLIC SPENDINGRECEIVABLESRECURRENT EXPENDITURESREGULATORY FORBEARANCERESERVERESERVE REQUIREMENTRESERVESRESIDENTIAL MORTGAGERETURNSALARIESSAMURAI BONDSAVINGS BANKSHARE OF INVESTMENTSOCIAL INSURANCE FUNDSSOVEREIGN BONDSOVEREIGN DEBTSTATE DEBTSTRUCTURAL PROBLEMSSUPERVISORY AUTHORITIESSURPLUSSWAPTAXTAX REVENUETAX REVENUESTIGHT MONETARY POLICYTIME DEPOSITTRADE BALANCETRANSPARENCYUNEMPLOYMENT RATEUNEMPLOYMENT RATESWAGESReportWorld Bank10.1596/21802