Parliament approved a draft of the 2017 state budget, 2017’s state budget framework, the 2017 budget for the Social Insurance Fund, and an overview of fiscal policy from 2018 to 2019. According to the 2017 state budget, revenue is expected to be 23.3 percent of GDP, expenditure is expected to be 32.3 percent of GDP, and deficit is expected to be 9.1 percent of GDP.
Cabinet expects to reach economic growth of three percent in 2017 by moving forward on mining megaprojects. The Government of Mongolia says that taxes will not be increased, to help create stability in the tax environment. Cabinet is aiming to improve infrastructure in the mining sector and to generate budget revenue by developing construction and investment to accelerate megaprojects.
The state’s administrative expenses (salaries and other asset expenses) will be cut by one percent in 2017. Changes to administrative regulations have also been proposed, including allowing administrators to have more flexible authority concerning spending, and allowing them more authority in making hiring and firing decisions to encourage more efficient expenditure and more effective public service.
Funds to promote health, sports, arts, and culture have been included in the 2017 and welfare and education programs did not see significant budget cuts. People 65 years and older will be eligible to receive 50,000 to 200,000 MNT (depending on their age) as financial aid during Tsagaan Sar and the Naadam festival, and 20.5 billion MNT has been budgeted to provide seniors with financial assistance.
The 89.5 billion MNT has been budgeted for a onetime payment of retirement allowances for employees and officers retiring from the public sector to maintain their welfare aids.
The state will provide 104.5 billion MNT to finance student loans, and 14.5 billion MNT has been budgeted for scholarships for students who have been accepted to the world’s top universities. Nine billion MNT has also been included in the 2017 budget for the operational and training costs of private and public polytechnic colleges. Cash allowances in the amount of 161.5 billion MNT will be distributed to targeted groups of children in 2017. Five billion MNT for childcare has been allocated in the 2017 budget of the Ministry of Labor and Welfare Protection to help continue childcare service programs.
The salaries of state prosecutors will be increased with state budget funding of 9.5 billion MNT, and the budget of the Constitutional Court included an additional 341.8 million MNT for salary increases for judges in 2017. According to the 2017 budget, the state will only fund critical projects in education and healthcare, and repairs for heating pipes requiring upgrades in Ulaanbaatar will be funded. The operating expenses of state organizations will be cut from 10 to 100 percent, depending on their duties.
Expenditures for a number of statefunded programs and events will be reduced by 410 billion MNT. The state will not fund any new construction projects through concession agreements in 2017. Parliament approved reducing the quantity of domestic bonds issued, subject to budget deficit, and says it will promote economic growth by ensuring the effective spending of foreign loans and aid, and funding only cost effective projects. A measure to reduce interest expenses to 2016 levels by using more optimal methods of debt control was also approved by Parliament.