Economic Overview

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Economic outlook of Mongolia

Mongolia’s economic growth is expected to be constrained by high inflation, persistent trade disruptions, tighter external financing conditions, and complex geopolitical risks before accelerating in 2023 as coronavirus disease (COVID-19) concerns and trade disruptions ease as reported by the Asian Development Bank (ADB).

ADB projects Mongolia’s economic growth to expand by 2.3% in 2022 compared to the 1.4% growth in 2021 before climbing to 5.6% in 2023, supported by domestic demand, investment, and recovery in industry, agriculture, and services.

Downside risks to the outlook stem from prolonged closures and restrictions at the main trade portals with the PRC, potential trade disruptions with the Russian Federation and Europe, and deeper impacts of the situation in Ukraine on the balance of payments and the government budget.

Latest developments in Mongolia 

The State Great Khural has approved the “New Economic Recovery Policy” in 2021. The policy is aimed at stimulating the economy amidst the pandemic, ensuring and strengthening economic independence, creating conditions for the implementation of the Long-term development strategy of Mongolia “Vision-2050”, and addressing the existing constraints to the country’s development.

The New Economic Recovery Policy consists of six pillars designed to address key economic constraints: i) border ports, ii) energy, iii) industrialization, iv) urban and rural development, v) green development, vi) state efficiency. It also includes a list of development projects that will directly address these challenges as well as amendments and revisions to 28 laws, and new laws as part of the legal reforms to implement these projects.The implementation of the New Economic Recovery Policy will require 57 trillion tugrugs for the first stage and 100-120 trillion tugrugs in total. It is obvious that the state cannot fund all the projects. Therefore, we look forward to cooperating with private investors and funds. We expect the per capita national income to double under the New Revival Policy in 10 years. Set forth to maintain 6% of growth in the long term, and labor force participation of up to 65%.

The Government of Mongolia, as a country which relies on its natural resources, decided to make Erdenes Mongol LLC to became the National Wealth Fund with an aim to properly distribute the country’s profits from natural resources and spend them for the economic development of the country, as well as for the benefit of its people in the form of saving and growth.

Moreover, the Government aims to encourage Mongolia’s post-pandemic recovery by inviting domestic and foreign investors for partnership, while keeping the infection rates as low as possible.  The nationwide vaccination campaign began in February of 2021 and as of June 11, 2022, 79.2% of the total population of Mongolia is fully vaccinated and more than 32% has already received booster doses. / Халдварт өвчин судлалын үндэсний төвийн мэдээгээр 2021.06.11-ний өдрийн 19.00 цагийн байдлаар улсын хэмжээнд Ковид-19 вирусын эсрэг вакцинд нийт 3.5 сая хүн хамрагдсанаас 1.6 сая хүн бүрэн тунд хамрагдсан байна. /

Monetary policy statement: Increasing the policy rate

The Monetary Policy Committee (MPC) of the Bank of Mongolia held scheduled meetings on June 20 and 22, 2022. Taking into consideration the current state of the economy and financial markets as well as outlook and risks to the domestic and foreign economic environment, the MPC decided to raise the policy rate by 1.0 percentage points to 10.0 percent.

Annual headline inflation reached 15.1 percent nationwide and 16.2 percent in Ulaanbaatar city as of May 2022. Increases in prices of petroleum, food and imported goods comprise majority of these inflation developments. In particular, domestic petroleum prices are driven up by increased crude oil prices in global markets, while surges in food prices especially in the past 2 months are mainly explained by continued logistical delays and supply disruptions leading to higher production input and transportation costs. Moreover, rises in prices of imported goods heightened through foreign inflation and exchange rate movements are contributing to price increases in other domestic products. As the impact of these factors is likely to persist in the upcoming quarters, outlook for inflation to stabilize within the the Central bank’s target interval is being delayed.

Despite slowdown in coal and crude oil exports associated with border restrictions undermining growth in the mining sector, non-mining activities improved in trade, services’ sectors as well as net taxes on products, boosting economic growth. Household consumption, which had been contracting consecutively for the previous 5 quarters, began to recover in the first quarter and contributed to domestic demand growth. Mining sector is projected to contract this year owing to outlook for external demand and border issues, while non-mining sector recovery is expected to continue on the back of easing of pandemic restrictions and improvements in domestic demand.

Inflation expectations are mainly driven up by external factors and negative consequences of geopolitical tensions, while deficit for balance of payments is widening due to reduced coal exports as a consequence of continued border restrictions and higher imports amplified through price increases in external markets. Therefore, the MPC decided to raise the policy rate with the aim to stabilize inflation expectations in the medium term, ensure external and domestic balance at an appropriate level and maintain relative yield on togrog in an environment of rising external benchmark rate.

The Bank of Mongolia will take subsequent necessary actions in a timely manner in accordance with economic recovery, inflation developments, supply-related constraints as well as the state of international relations.

Rating report: 

S&P Global Ratings affirmed that Mongolia’s long-and short-term sovereign credit ratings at B, with a stable outlook. The ratings take into account the country’s weak economic prospects, balance of payments and public finances. Mongolia’s ratings could be upgraded if the development of two large mines, the Oyu Tolgoi and Tavan Tolgoi mines, hastens economic growth andenhances fiscal and external performances more than currently expected, the rating agency said. Conversely, Mongolia’s ratings could be downgraded if the country’s external liquidity significantly weakens.

On 08 Jun, 2022, Fitch Ratings Affirmed that Mongolia’s sovereign ratings of ‘B’ are underpinned by the country’s governance indicators and per capita income that are strong relative to ‘B’ peers, and its favourable medium-term growth prospects. The ratings are constrained by Mongolia’s high reliance on external funding, narrow economic base that is focused on commodity exports to China, and recurring bouts of political volatility. It is expected that border disruptions with China will ease in 2023, although further downside risk could emerge if trade disruptions are more prolonged. Global economic spill-overs from the war in Ukraine and supply bottlenecks from import disruptions weigh on real incomes and private consumption.  Fitch projects GDP growth will accelerate to 6.3% in 2023 and 6.8% in 2024, as headwinds from trade disruptions and the war in Ukraine wane.  It orecastedthat the fiscal deficit to narrow to 3.7% of GDP in 2023, from 4.4% in 2022, on stronger revenue collection as the economic recovery gains traction. The baseline projects Mongolia’s general government debt will remain high at 65.3% of GDP by end-2022. The debt burden is broadly in line with the current median of 65.9% for the ‘B’ rating category. We expect the government debt ratio will modestly decline over the medium term.


For the first 6 months 2022, Mongolia traded with 145 countries and the total volume of foreign trade is valued at USD 9256.4 million, indicating an increase in USD 1883.9 million or by 25.6 percent compared to the year 2021. The export volume exceeded (is short of) the import volume by USD 1360.2 million and foreign trade balance turned to positive.


The total value of all exported goods and raw materials is USD 5308.3 million, which indicates an increase by 29.1 percent compared to the same period of the last year.

Mineral products increased by USD 1047.7million or 30.9 percent, export of textiles and textile articles increased by USD 16.3 million or 6.6 percent, plastics and rubber and articles thereof increased by USD 1.6 million or 21.7 folds, export of natural or cultured pearls, precious or semi-precious stones increased by USD 295.9 million or 2.3 folds respectively.

99.1 percent of exported mineral products in the first 6 months 2022 accounts coal, copper concentrate, molybdenum concentrate, fluorspar, iron ores, zinc ores and concentrates and crude oil. Compared to 2021, the export of coal decreased by 1206.2 thousand tons, the total amount increased by USD 1332.9 million and the average border price has increased by USD 181.3. 87.9 percent of coal were exported to China. Compared to 2021, the export of copper concentrate increased by 132.9 thousand tons and the total value increased by USD 277.8 million, while the average border price has fallen by USD 8.2. 100.0 percent of exported copper concentrate went to China.

Mongolia has exported goods to 57 foreign countries, out of which 82.4 percent to China, 9.2 percent to Switzerland, 4.5 percent to Singapore and 1.4 percent to the Republic of Korea. The named countries account for 97.6 percent of total export.


The total value of imported goods and raw materials is USD 3948.1 million, which indicates an increase by USD 686.9 million or 21.1 percent compared to the same period of 2021.

The increased import was affected mainly by a decrease of import of goods falling into chapters covering mineral products; vehicles, aircraft, vessels and parts thereof and mechanical appliances, electrical equipments, parts thereof. 87.3 percent of the total import of mineral products come to oil products. The total volume of imported petroleum products increased  by 29.8 thousand tons and total value by increased USD 306.5 million. Average border price per 1 ton has  increased from USD 549.9 to USD 885.2 The average price of autocar gasoline from USD 562.6 to USD 830.4. The total value of imported diesel fuel decreased by USD 60.5 million, total volume of imported diesel fuel increased by 131.4 thousand tons and the average import price has gone up by USD 367.4.

Mongolia has imported goods originating from 144 different countries including the China (34.7%),  Russian Federation (30.7%), Japan (8.5%), Republic of Korea (4.9%),  USA (2.3%)and the Federal Republic of Germany (2.1%). They account 83.25% of total import.

Source of information:

Foreign trade data for the first 6 months 2022 has been based on 99157 export customs declarations, and 135282 import customs declarations and other sources. 9680 export customs declarations and 5 import customs declarations were processed at temporary operating border-crossing ports opened during the reporting period /Customs General Administration of Mongolia/.

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