Good news for Mongolia's economy, ADB explains why

ADB forecasts continued economic growth in Mongolia through 2025.

Information on Mongolia's economic growth. (Source: ADB)

Strong external demand, coupled with rising consumption and government spending, are expected to drive Mongolia's economic growth this year and next, the Asian Development Bank (ADB) said.

According to the recently released Asian Development Outlook (ADO) report for September 2024, ADB forecasts Mongolia's economic growth to reach 5.5% in 2024 (up from the 4.1% forecast in April) and continue to increase to 6% in 2025. The service and industrial sectors, especially mining, continue to be the main drivers of the country's growth.

Mongolia’s coal exports rose 37.6 percent in the first half of this year, boosting budget revenues and boosting related service industries, especially freight transport. Meanwhile, inflation has now eased to acceptable levels, with forecasts of 6.8 percent this year and 7.2 percent next year, driven by strong domestic demand.

However, risks to growth could come from slowing demand from China, slow expansion of the Oyu Tolgoi mine and supply disruptions due to geopolitical and climate tensions.

Earlier this month, Fitch Ratings upgraded Mongolia's credit rating to "B+ with a stable outlook," reflecting an improvement in economic conditions. Fitch Ratings noted that Mongolia has implemented sound debt management policies, reduced its external debt, and increased its foreign exchange reserves.

In addition, political stability and good governance also contributed to the rating upgrade. Mongolian Prime Minister Oyun-Erdene Luvsannamsrai believes that the decision by Fitch Ratings will help increase investor confidence and support the government in implementing 14 major projects.

Source: https://baoquocte.vn/tin-tot-den-voi-nen-kinh-te-mong-co-adb-ly-giai-nguyen-do-288125.html