In January, inflation stood at 5.6 percent, which is lower than the central bank’s target. Thus, it has been fluctuating around 5 percent for the last three months in a row. The weakening effect of supply factors also triggered inflation to stabilize. Meat prices, which have been increasing by 30 percent and burdening the CPI, decreased by about 16 percent. On the other hand, this indicates a slowdown in economic growth. At the end of 2019, the Monetary Policy Committee of the Bank of Mongolia (BoM) proposed the central bank to reduce its interest rate and support the economy. However, the policy rate remained untouched at 11 percent. The inflation is likely to gradually slow down to around six percent under the influence of supply factors in the first three quarters of this year. In the fourth quarter of 2020, the central bank anticipates that the baseline effects will grow slightly and the inflation may stabilize around the target level.

Published Date:2020-02-19