Overheating Risks Intensify

Overheating risks for the Mongolian economy are rapidly moving to the fore, and although we do not rule out additional monetary tightening by the central bank in bid to rein in credit growth and ensure a softer landing for the economy, we believe that declining external demand and falling investment will see renewed interest rate cuts in 2012. We currently forecast economic growth to slow to 5.7% this year, down from an estimated 15.8% in 2011.

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