S&P Global Ratings affirms Mongolia at 'B', outlook stable

2022-07-25 11:40:21

Ulaanbaatar/MONTSAME/. S&P Global Ratings affirmed the "B" Foreign Currency LT credit rating of Mongolia on July 21, 2022. The outlook is stable.

The following factors led S&P to keep the credit rating and the economic outlook unchanged:

Mongolia's economy is expected to grow by 2.5 percent in 2022. The outlook for economic growth for the next 2-3 years will continue to be positive due to the influence of foreign direct investment in the mining sector.

Until 2025, real GDP growth is expected to be 6.4 percent per year on average because sustainable investments will be made in mining projects such as Tavantolgoi and Oyutolgoi. At the beginning of this year, the Government of Mongolia successfully concluded a negotiation with Rio Tinto regarding the Oyutolgoi project, and issues related to cost overruns were resolved.

Maintaining the credit rating at ‘Stable’ in the future is due to the expectation that the economic recovery will continue normally. Also, from 2022 Mongolia's budget, debt, and foreign sector situations will improve.

Mongolia’s external debt risk is decreasing with the credit support of international donor partners. The Bank of Mongolia successfully extended the CNY 15 billion swap agreement with the People's Bank of China in August 2020 until 2023.