IMF staff team concludes fifth review

The International Monetary Fund (IMF) staff team led by Geoff Gottlieb concluded its fifth review of the extended fund facility program that Mongolia is implementing with support from the fund.

According to the staff, the discussions focused on the implementation of program, the medium-term outlook, and policies and structural reforms needed for debt sustainability, the rehabilitation of the financial system, and high-quality growth while protecting the poor. During their stay in Mongolia from July 25 to August 6, the staff team met several government officials and agencies.

One of the key discussion points for the staff team and authorities was the potential increase of salaries for civil servants. On July 30, the IMF staff team began meetings with the Confederation of Mongolia Trade Unions (CMTU) about the prospect of raising salaries.

The staff team emphasized the need to further cut inefficient expenditure from the state budget in order to finance any increase in salaries. While, there have been no concrete news on any agreements between the government and the staff team on any potential increases. Gottlieb underlined in a meeting with the CMTU that it is the goal of the CMTU, Cabinet, and the staff team to find a common ground on how to finance this increase in salaries.

While IMF is not inherently opposed to increasing salaries, the question of how to foot the understandably large bill to the state budget without further increasing fiscal pressure is an important issue to address, the IMF staff team said.

“The mission held productive discussions with the authorities on the policies needed to complete the fifth review under the extended fund facility arrangement. Recent macroeconomic performance has been strong with key targets met and growth is reviving although significant vulnerabilities remain,” Gottlieb said at the conclusion of the visit.

“Good progress has been made especially regarding structural reforms and policies to rehabilitate and strengthen the financial sector. Discussions including on the macroeconomic policy mix will continue in the near future.

The team thanks the authorities for their cooperation, constructive dialogue, and hospitality during its stay in Mongolia,” he added.