Macroeconomic Forecast Mongolia

BMI View: According to latest data from the National Bank of Mongolia, deflation came in at 1.2% y-o-y in October, improving on the 1.9% deflation recorded in September, and keeping the Mongolian consumer price basket broadly on track for our 1.0% deflation end-year forecast. The easing of deflationary pressures was driven primarily by food prices, which recorded a 5.4% y-o-y contraction, improving on the 7.3% y-o-y fall posted in September. With foreign capital inflows set to pick up strongly in 2010, in line with a broader economic recovery, we expect inflation to return, and are currently pencilling in a 7.0% end-year figure.

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