On June 30, Prime Minister J.Erdenebat made an address to Parliament during its regular session, reporting that the economic recession had ended and that the basis for further development has been laid.
The Prime Minister detailed how an economy that once had an annual GDP growth of 17 percent had been derailed, registering a 1.6 percent shrink in GDP in the third quarter of 2016.
“By the end of 2016, GDP growth had reached 1.2 percent and further surged to a surprising 4.2 percent growth in the first quarter of 2017. We were able to revive a failing economy in only three quarters,” said J.Erdenebat.
With the help of the IMF extended fund facility program, the foundation for economic growth has been set according to the Prime Minister J.Erdenebat. Although the statistics of economic growth are accurate, analysts question whether the unexpected growth is really attributed to the IMF program, as opposed to external forces such as coal prices.
Rising value-added production has been credited as the reason for the 4.2 percent GDP growth. Sales revenue from value-added production and service was at 122 billion MNT in the first three months of 2017. In comparison, the first quarter of 2016 saw a GDP growth of 3.2 percent.
The biggest contributors to growth were increases in production in agriculture, services, and construction. On the other hand, growth in the mining and manufacturing sectors had declined.
| Projected GDP growth |
2017 |
2018 |
2019 |
| Ministry of Finance |
-0.1 |
1.8 |
8.1 |
| World Bank |
-0.2 |
1.9 |
8 |
| Asian Development Bank |
2.5 |
2 |
|
"Our government was able to stop the depreciation of the MNT and protect the purchasing power of citizens by increasing foreign exchange reserves, improving fiscal discipline, stabilizing the macro economy and restoring investor confidence," he said.
Mongolia plans to cap the state debt at 60 percent of GDP by 2021 and even lower in the future, the Prime Minister added
Mongol Bank received an initial fund of 38.6 million USD from the IMF under an enhanced financing program as part of its extended fund facility on May 25, 2017.
After the implementation of the program, Mongolia will receive a soft loan of 434.3 million USD from the IMF to help stabilize the country's economy and support its economic reforms, the government reports.
