The head of the IMF warned that that the extraordinary 2012 budget passed by Parliament may lead to economic disaster down the road. Parliament Speaker D. Demberel received Steven Barnett, head of the International Monetary Fund's (IMF) working group.

“The future of Mongolia may be bright and people's lives might be improved through economic circulation of mineral wealth, but this year's budget retreated from achievement of the previous year and has huge expense and is profligate,” said Barnett.

Macro economic growth may be overly optimistic and does not match fiscal policy aimed at capping inflation below 10 percent, he added.  The Law on Budget Stability takes effect In 2013, so it would be wise to hold state budget expenditures within that level in a mid-term budget.

The speaker has said that the 2012 budget will not undergo revision, and that the government's current expenses will not exceed that of 2011. Although investments proposed by the cabinet will be discussed,  some will be postponed.

“We will analyze how income resources are calculated and whether prices of products are taken higher than those of the world market,” said Demberel. “Additional income will go to the Stability Fund.

He added that Parliament will not reject the government's proposal on salaries and pension increases.