Prices up, lives down


Last month the inflation rate reached 12.3 percent, according to the National Statistical Office. This is an indicator four percent higher than Mongolbank’s hopes to keep the inflation rate at a single digit. Meanwhile, the inflation rate has rapidly risen (in the last four years inflation has increased by five percent), but the salaries, pensions and welfare benefits of Mongolian citizens have not increased at the same speed. Commodity product prices are becoming more expensive day by day, emptying citizens’ pockets. However, the government seems to be ignoring this as if it is a common thing. The Agency for Fair Competition and Consumer Rights (AFCCR), which is in charge of protecting consumer’s rights, is silent. However, the agency is the regulating body that should speak for citizens, demanding that product prices should not be increased considering the foreign exchange rate boost, and it is the authority which should take measures against people who fix prices.
Four months ago a dollar was equivalent to 1,717 MNT at Naiman Sharga currency exchange center, but by the middle of this week the dollar rate was increased to 1,825 MNT, proving that day by day the value of our national currency is dropping. Economists warn that the dollar might reach 2,000 MNT if the rate increases with such continued speed.
Russian company Rosneft will lower its oil prices for Mongolia. But this won’t influence domestic retail oil prices. If the dollar rate hadn’t gone over 1,800 MNT, petrol prices would have decreased by 400 MNT per liter.
One Twitter user tweeted that one can’t buy a bag full of groceries from the supermarket for 70,000 MNT. This means that the elderly who get a pension of 207,300 MNT a month will see harder times, only able to buy three bags of groceries a month.
The Government of Mongolia and Central Bank are jointly carrying out several sub-programs to reduce the cost of commodities and imports, and to stabilize the prices of main food commodities. Under a project led by Mongolbank and commercial banks, soft loans of 77 billion MNT were granted to businesses in order to maintain meat resources. Even though measures have been directed at stabilizing the cost of petrol and meat, positive outcomes haven’t been seen yet.
Two months ago a kilogram of mutton with bone cost 6,500 MNT, while this week it reached 8,500 MNT and a kilogram of beef reached 10,000 MNT. This is a country with a population of around three million people and 45 million heads of livestock. The National Statistical Office is the only authority that determines the inflation rate, grounding it on 329 categories of products and goods. But they hesitate to explain how the numbers they arrive at are adjusted and correlate to citizen’s standards of living. If they explain the essence of their statistics, we could learn factual information about the relationship between income and inflation.
Private Mongolian companies incurred losses of 775 billion MNT because of current exchange rates. Last Thursday Eznis Airways stopped their operations temporarily, and now Oyu Tolgoi is cutting 300 jobs. The economy of Mongolia grew 7.4 percent higher in the first quarter of this year compared to last year. Shall we still believe that the livelihood of Mongolians will improve when the inflation rate is at 12 percent and economic growth is not positively influencing people’s lives?


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