Come election year, Mongolia’s budget spending takes a rollercoaster ride, soaring high with excitement! 🎢

It's like a budget bonanza during the election spectacle. A big budget has been given the green light because of the upcoming elections next year.

Election Year Budget Trends

Every 4 years during Mongolia’s parliamentary elections, the budget sees a significant boost. For instance, in 2008, it shot up by 47.1%. This trend continued in 2012 as well as subsequent election years.

Budget Reduction After Elections

However, right after the election excitement, budget spending usually takes a hit. In 2009, it dropped by 8%, and in 2017, by 5.1%. This suggests that election events impact budget decisions more than market or economic conditions.

• Next Year's Budget Outlook: Following the rules, the budget spending for the next year is set to be 22.3% higher than 2023, reaching ₮27.4 trillion. This marks a 3 fold increase in budget expenses during the 8 years of the MPP government.
• Consequences of Increased Spending: Unfortunately, the downside is a soaring deficit during election years. In 2020, the deficit hit a record of ₮4.4 trillion, and in 2016, ₮3.7 trillion. Only in 2010 and 2018 did we manage to avoid deficits.
• But hey, the budget drama doesn't end there! Increasing spending and deficits become mischievous troublemakers, causing inflation and playing tricks on the currency's purchasing power. In the future, the potential exists for credit rating agencies such as Moody's to issue a downgrade for our credit, resulting in increased costs for the government when seeking to borrow funds.

Final Thought

The budget deficit for the next year is expected to reach ₮2.1 billion. When will this cycle of soaring spending during election years come to an end?