Ulaanbaatar
Mongolia’s Growth to Rise in 2023 Before Accelerating in 2024 - ADB
Economy
Ulaanbaatar, April 5, 2023 /MONTSAME/. The Asian Development Bank (ADB) launched their flagship publication “Asian
Development Outlook" on 4 April. During the launch, Mongolia country
specific outlook was presented.
In its latest flagship economic report, ADB Outlook April 2023, ADB projects Mongolia’s economic growth to expand
to 5.4% in 2023 compared to 4.8% growth in 2022, before climbing to 6.1% in
2024, supported by exports, recovery in mining, and its positive spillover to
transport and other pursuits.
Average inflation will moderate to 10.9% in 2023 and
8.7% in 2024 as supply shocks and trade disruption risks wane. However, it will
still exceed the central bank target of 6%, mainly on pass-through of local
currency depreciation and revived domestic demand. More aggressive fiscal
consolidation will support macroeconomic external balance and reduce crowding
out impacts on the private sector. The current account deficit is projected to
diminish, mainly as merchandise exports increase and the service deficit
narrows with lessened trade disruption, lower risk premiums for shippers, and
lower transportation service charges.
“After 3 years of economic difficulties induced by
exogenous shocks, including COVID-19, border restrictions with the PRC and the
Russian invasion of Ukraine, the economy of Mongolia is now on a recovery path,
supported by both external demand and domestic policy responses,” said ADB’s
Country Director for Mongolia Pavit Ramachandran. “Maintaining growth momentum
while reducing the persistently high inflation is critical to ensure that this
economic growth is more inclusive.”
Downside risks
to the outlook stem from a worsening situation regarding the Russian invasion
of Ukraine, new COVID-19 variants or waves, a significant commodity price
correction, domestic political risks, and the adverse implications of offtake
barter agreements.
