Mongolia Economic Update, April 2023

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Mongolia’s economy is projected to accelerate to 5.2 percent growth in 2023 from 4.7 percent in 2022 as mining and exports expand and the post-pandemic recovery in services continues.

Growth is also anticipated to be supported this year by household consumption, which is expected to remain steady as the labor market improves, along with substantial public investment, according to the World Bank’s latest  Mongolia Economic Update.  Services, particularly tourism, are projected to continue recovering from restrictions associated with the pandemic, offsetting sluggish agricultural production due to the recent harsh winter.

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00:07 The Mongolian economy is expected to accelerate to 5.2% in 2023

00:13 after recovering last year

00:15 and surpassing its pre-pandemic level.

00:18 The increase this year will be driven by a rapid recovery

00:21 in mining production resulting from the removal of

00:24 border restrictions and the start of the underground mining

00:28 stage at Oyu Tolgoi.

00:29 The continued recovery in services from the pandemic

00:33 will also provide a boost.

00:39 The main risks are related to a larger than

00:43 expected tightening of monetary policy in advanced economies,

00:48 geopolitical tensions,

00:49 the accumulation of sizable government contagious liabilities,

00:54 and uncertainty

00:55 around coal export agreements.

01:02 First,

01:03 the report emphasizes the importance of fiscal discipline

01:07 and reforms to enhance governance and spending

01:11 efficiency to improve fiscal and debt sustainability.

01:15 Second,

01:16 Mongolia needs to ease balance of payment

01:18 pressures by allowing more exchange exchange rate flexibility

01:24 and to better prioritize projects in the medium term.

01:27 Policies to boost non-mining exports and increase capital inflows are paramount.

01:33 Third,

01:35 effective reforms to promote economic diversification

01:39 will be critical in ensuring sustainable growth and resilience

01:44 to a domestic,

01:46 external,

01:46 and climate shocks.

01:48 And lastly,

01:49 the report proposes reforms aimed at

01:52 expanding labor opportunities for the workforce,

01:55 upgrading skills,

01:56 and creating a comprehensive labor market information system.

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The Mongolian economy is expected to accelerate to 5.2% in 2023 after recovering last year and surpassing its pre-pandemic level. The increase this year will be driven by a rapid recovery in mining production resulting from the removal of border restrictions and the start of the underground mining stage at Oyu Tolgoi. The continued recovery in services from the pandemic will also provide a boost. The main risks are related to a larger than expected tightening of monetary policy in advanced economies, geopolitical tensions, the accumulation of sizable government contagious liabilities, and uncertainty around coal export agreements. First, the report emphasizes the importance of fiscal discipline and reforms to enhance governance and spending efficiency to improve fiscal and debt sustainability. Second, Mongolia needs to ease balance of payment pressures by allowing more exchange exchange rate flexibility and to better prioritize projects in the medium term. Policies to boost non-mining exports and increase capital inflows are paramount. Third, effective reforms to promote economic diversification will be critical in ensuring sustainable growth and resilience to a domestic, external, and climate shocks. And lastly, the report proposes reforms aimed at expanding labor opportunities for the workforce, upgrading skills, and creating a comprehensive labor market information system.

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worldbank/Mongolia Economic Update April 2023

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worldbank/Mongolia Economic Update April 2023-AVS

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Mongolia Economic Update April 2023

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Mongolia Economic Update April 2023

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