Govt to reduce debt-to-GDP ratio by 8.1 percent in 2019

ZGM DAILY

2019-01-24 10:30 GMT+8

GROSS DEBT OF MONGOLIA STOOD AT MNT 21.4 TRILLION AS OF 2018

Ministry of Finance Khurelbaatar Chimed has announced to cut debt-to-GDP ratio by 8.1 percentage point, to 55.3 percent this year.

As of the third quarter of 2018, the gross debt of the Mongolian Government stood at MNT 21.4 trillion. Last year, the country was spending one-eighth of budget expenditure on debt interests, which is estimated to be around one-thirteenth this year following the expected payment.

The 2019 budget allocates MNT 856.6 billion on loan interests. The Government is expected to settle high-amount debts starting from 2021, including USD 500 million of Mazaalai bond in 2021 and USD 1 billion of Chinggis bond in 2022. Minister of Finance also noted that the Government is preventing high-amount debt repayments to coincide in a same year.

“Repaying large amounts of debt in one year depreciates the MNT rate, which is difficult to stregthen later on. Therefore, the ministry is making an effort in equalizing debt repayments for each years,” remarked Mr. Khurelbaatar.

This year, the Government of Mongolia is planning to raise MNT 1.2 trillion investment from foreign loans and aids, of which loans amount to MNT 1.1 trillion. 38 percent of the gross amount will be expended on oil production and improving energy supply, 20 percent on renovation of wastewater treatment plant and reduction of environmental pollution.

On the contrary, the budget was planned a MNT 1.9 trillion in deficit, which is 5.4 percent of GDP.

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