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East Asia Pacific Economic Update, April 2014 – Mongolia Brief and Key Indicators



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KEY FINDINGS

  • Mongolia’s economy recorded another period of double digit growth of 11.7 percent in 2013, led by stronger copper and gold production.
  • Economic policies have been focused on growth stimulus through large off -budget spending and loose monetary policy.
  • National headline inflation has been accelerating since July, reaching 12.5 percent (year-on-year) in December 2013 and 12.3 percent in January 2014.
  • The annual current account deficit in 2013 was US$3.2 billion—equivalent to 28 percent of GDP—following the deficit of US$3.4 billion in 2012.
  • The large financing gap in the balance of payments has led to a continuous decline in international reserve levels and a sliding exchange rate throughout the year.
  • In 2014, economic policies are likely to repeat the expansionary path of the last year in light of continued political emphasis on double-digit economic growth.
  • Continued economic stimulus relying on external borrowing and liquidity injection will likely add to economic imbalances.