April 9 (Bloomberg) -- Inflation in Mongolia slowed to below 10 percent for the first time in two years at the end of the first quarter, Sandagdorj Bold, chief economist for the nation’s central bank, said in an interview today.
Consumer prices rose 9.8 percent from a year earlier at the end of the quarter, compared with a pace of 14 percent at the end of December, Bold said by telephone today. Inflation in March rose 0.8 percent from February, compared with a pace of 2.2 percent in March 2012, he said.
The Bank of Mongolia last week cut interest rates for a second time in three months after economic growth slowed to 12.3 percent last year from a record 17.3 percent in 2011 and foreign investment fell 17 percent. Mongolia’s MSE Top 20 Index of stocks fell to a two-year low today.
Mongolia’s government has reduced its social welfare payments by half as compared with last year, helping rein in inflation, Bold said. Authorities distributed 1 trillion tugrik ($709 million) last year, he said.
The government under the Mongolian People’s Party increased payments last year ahead of June elections to fulfill an earlier promise to share Mongolia’s mining wealth with the nation’s population. The Democratic Party won those elections to take control of the parliament.
The government has also taken steps to stabilize the price of fuel and consumer goods, Bold said.
Mongolia’s central bank has set a target to reduce inflation to 8 percent by the end of this year.
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