The International Monetary Fund (IMF) has estimated that Mongolia’s economy will develop at 4.5 percent in 2023. In the previous estimate, it was expected to expand by 5 percent, but in the April report, it lowered.

IMF lowered its 2023 economic growth forecast for Mongolia by 0.5 percentage points and in addition, the forecast for the growth of the GDP in 2024 has been reduced by 1.5 percentage points, as well. As a result, Mongolia’s economy is expected to grow at 5.5 percent next year.

IMF highlighted the challenge of reducing budget deficits at a time of rising interest rates and rising debt levels in Asia and the Pacific. The amount of government debt in the region has increased significantly since before the pandemic.

Most governments are expected to cut their budgets this year and next. However, it warned that this may not be enough to stabilize the debt. The International Monetary Fund recommends that Asia and the Pacific countries need to tighten policies to reduce fiscal deficits to maintain sustainable growth over the medium term.

Furthermore, a report of the Ministry of Finance shows that as of the fourth quarter of 2022, the balance of foreign debt of the Government is 29.6 trillion MNT. In other words, the amount of foreign currency debt of Mongolia has reached by 230 percent of the gross domestic product, according to the European Development Bank.