The UB Post-Leading English News

Over 30 taxes were reduced, including the Value Added Tax (VAT), which was lowered 0.5 points. In January, the government also reduced the Social Insurance Premium 10 points and introduced a Tax Amnesty, hoping to influence the hidden economy and reduce the non-tax revenue.
The National Statistics Committee’s report revealed that despite the tax cuts, tax revenue still increased 65.5 percent.
Compared to the previous year, taxes on foreign trade increased by 20.7 percent, VAT increased by 13.9 percent and excise tax increased by 25.6 percent.
Non-tax revenue dropped dramatically, however, decreasing 47.7 percent to Tg36.7.

The government’s overall budget amounted to Tg175.4 billion, with total expenditure and net lending of Tg137 billion, leaving a surplus of Tg38.4 billion.
According to preliminary figures from a Bank of Mongolia report, money supply is reaching Tg2337 billion, an increase of 50.2 percent compared to January 2007.
At the end of January, there was Tg338 billion in circulation, up 50.7 percent compared to the same period in 2007.

Mongol Bank explained that money supply suddenly grew in the last month of the quarter, despite otherwise being lower.
The increased supply of money has been due to government expenditure on social purposes, such as increased wages and pensions.
In particular, there has been a dramatic increase in child allowances and allowances for newly-wed couples. State employees were also given increased wages and salaries in the first and fourth quarter of 2007.
Of the whole annual budget expenditure, 50.4 percent, or Tg881.9 billion, was distributed in the final quarter.
The government is facing re-election in the first half of this year.

Mongol Bank said that over the past three years, total deposits and total loans have increased by 56.3 percent, 50.9 percent and 68.1 percent respectively.
Expansionary fiscal policy continued over this period, with higher civil servant salaries and increased social care handouts.
Inflation in neighboring countries and trade partners has also continued to climb, which, when combined with the higher prices for crude oil and some food items, placed high stress on the inflation rate.

Mongol Bank’s inflation measurements had it at 15.1 percent in December 2007, but in the year to January has it at 17.5 percent.
The inflation rate rose another two points in January of this year, despite the government establishing a council to stabilize consumer prices.
Prices of food and nonalcoholic beverages increased by four percent and, with prices of transport and education remaining stable in January, was a major contributor to the increase in the overall index.
While exports increased 52.7 percent during this time, imports also increased 87.2 percent.

B.Badamtsetseg, Head of the Macro Economic Department of the National Statistics’ Committee, said that for the first two months of this year the exports benefit reached US$36.4 million, down more than US$20 million compared to the previous years.
According to the statistics, mineral exports accounted for the largest percentage of exports, reaching US$29.7 million. Natural or cultured pearls, precious metal and jewelry reached Tg26.8 million, while textiles and textile articles decreased by US$2.8 million.
Base metals and articles exports rose by US$2.2 million. Live animals and animal products reached US$1.1 million. Raw and processed hides, skins, fur and similar articles accounted for US$0.5 million.

The volume of copper concentrate exports increased 2.7 percent and their value in US dollars increased 16.5 percent compared with the same period of the previous year.
In January 2007, the average price of copper concentrate per ton was US$1127.7. this year, however, it was US$1280, a jump of 13.5 percent.
Compared with the same period of the previous year, mineral products imports, which are comprised high percentage in the imports, increased by US$23.0 million. Imports of auto, air and water transport vehicles and their spare parts increased by US$22.3 million.
Imports of machinery, electrical appliances and spare parts was worth US$12.2 million.

Mongolia also imported US$10.6 million of vegetable origin products imports, US$4.3 million in food products, US$3.1 million in base metals and articles thereof and US$2.6 million of chemicals.
Textiles and textile article imports decreased by US$0.6 million, however, compared with the same period of the previous year.
Petrol imports increased by US$ 6.3 million. Cars increased US$ 4.5 million, flour rose US$7.0 million, while electricity imports decreased by US$ 0.1 million.