Minister of Finance J.erdenebat: 'it Might Take 4 to 5 Years to Lower Debt to 40 Percent of Gdp'

The Mongolian People's Party (MPP) opposed increasing the debt ceiling, but there are rumors that the debt ceiling will be increased. Could you give our readers an official explanation?

I didn't say that the debt ceiling will be increased. As for the preliminary data, the debt ceiling is 49.9 percent, which means that it has already exceeded its limit according to the law on budget sustainability. And it might reach 53 percent by the end of this year, because of the changes in exchange rates and interest rates. The MPP is trying hard to avoid increasing the debt ceiling. We have to find solutions on better debt management, and policy to reduce debt to 40 percent of GDP. But now the debt ceiling has exceeded 50 percent, so it might take some time to lower it. It might take four to five years. As of today, it's impossible to lower the debt ceiling to 40 percent to suit the law.

Is a decrease possible next year?

The current state budget is to be approved with seven trillion MNT. If we want to reduce it to 40 percent of GDP, we will have to cut two trillion MNT to meet legal requirements. In order to do this we will have to repay commercial bonds and commercial loans.

We have to improve debt management and change debt structure. Up until now, we have been paying debt through high interest commercial loans and we also took on highcost bonds from foreign countries. In this situation, the service costs increase. We are discussing the possibility of changing these loans to longterm concessional loans.

Some parliamentarians believe that if we don't take more money from overseas, the economic situation will get worse, while others believe that the most important thing is to not add to the nation's debt. How do parliamentarians see this issue inside the government?

People are expressing various positions, but we have to seek all possible...