N. Zoljargal , Governor of Mongol Bank, has said the nation’s growth rate may slow by a third this year from a record 17 percent in 2011 as inflows of foreign investment cool. “It’s a reality check for us,” he said in an interview in Hong Kong, expressing the hope that the pace of expansion may be a “very healthy” 11 to 12 percent. He was speaking a day after Standard & Poor’s had revised down its outlook for Mongolia’s debt rating to stable from positive, citing increased risks of volatility in an underdeveloped economy. The World Bank said in February that the nation should guard against “another boom-and-bust cycle”, while foreign investors are concerned after Rio Tinto Group was asked to renegotiate its OT deal.
Zoljargal said Mongolia is focusing on investment in infrastructure to improve the competitiveness of the mining industry that is the drawcard for overseas investors. The International Monetary Fund has said that growth is likely to be in “double digits” this year and to accelerate in 2013 as Oyu Tolgoi starts to produce and the Tavan Tolgoi mine expands. Mineral product exports, which account for more than 90 percent of the country’s goods sold abroad, fell 41 percent in September from a year earlier to $324 million, on reduced demand from China, government statistics show. That was the gest decline in three and a half years. Perceived uncertainty over investment rules after a political debate over renegotiating the Oyu Tolgoi contract is hurting Mongolia’s standing among foreign investors, the IMF said.
(All items have been edited from news agency reports or company releases.)