IMF representative meets Altankhuyag, Lundeejantsan, to warn against budget revision
IMF representative P.Ramlogan yesterday met with First Deputy Premier and Democratic Party head N.Altankhuag and the leader of Mongolian People"s Revolutionary Party group in Parliament, D.Lundeejantsan. He told both leaders that the IMF could not complete its mandatory annual review of the Mongolian economy until the fate of the proposed fiscal stability law was determined in Parliament.
Ramlogan emphasized that only a sustainable and effective macroeconomic policy would be able to reduce poverty and the rate of unemployment, and stressed the need to keep the budget deficit under 5 per cent of the Gross Domestic Product and to create a fund where all income in excess of budget estimates will be put for later use, instead of being spent immediately.
The IMF was of the view that failure to do either could lead to runaway inflation, and Ramlogan urged a review of the proposed budget revisions incorporating fresh programs of expenditure that would raise budget expenses by 17 percent. The IMF and other donor institutions may then be constrained to stop their assistance to Mongolia. Altankhuyag agreed with the analysis and said the government was trying to follow the IMF advice. He suggested that the IMF should also talk to party groups in Parliament.
Lundeejantsan told Ramlogan that a working group was presently discussing the budget revision programs. There had to be an improvement in people’s life but inflation also had to be under control. He said his group was ready to cooperate with the IMF.
Ramlogan emphasized that only a sustainable and effective macroeconomic policy would be able to reduce poverty and the rate of unemployment, and stressed the need to keep the budget deficit under 5 per cent of the Gross Domestic Product and to create a fund where all income in excess of budget estimates will be put for later use, instead of being spent immediately.
The IMF was of the view that failure to do either could lead to runaway inflation, and Ramlogan urged a review of the proposed budget revisions incorporating fresh programs of expenditure that would raise budget expenses by 17 percent. The IMF and other donor institutions may then be constrained to stop their assistance to Mongolia. Altankhuyag agreed with the analysis and said the government was trying to follow the IMF advice. He suggested that the IMF should also talk to party groups in Parliament.
Lundeejantsan told Ramlogan that a working group was presently discussing the budget revision programs. There had to be an improvement in people’s life but inflation also had to be under control. He said his group was ready to cooperate with the IMF.
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