Mongolia Economic Update, November 2015
Mongolia’s growth sharply slowed to 3.0 percent in the first half of 2015. External demand is weakening due to a continued dampening of the commodity market and slower growth in China, translating into a drop in exports. Slowing domestic demand is...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/11/25479527/mongolia-economic-update http://hdl.handle.net/10986/23337 |
| Summary: | Mongolia’s growth sharply slowed to 3.0
percent in the first half of 2015. External demand is
weakening due to a continued dampening of the commodity
market and slower growth in China, translating into a drop
in exports. Slowing domestic demand is largely caused by a
plunge in investment due to falling foreign direct
investment (FDI). Measures were taken to curb the budget
deficit, debt, and off-budget expenditures. New deficit and
debt ceilings were set for 2015-18 by amending the fiscal
stability law (FSL) in January. The 2015 budget was amended
in January to curb the structural deficit within 5 percent
of gross domestic product (GDP). Growth is expected to slow
in 2015-16, but a recovery in foreign investment will begin
to support the growth of the non-mining sector in 2016. The
Development Bank of Mongolia (DBM) is expected to provide
about Mongolian Tughrik rates (MNT) 600 billion to its
commercial portfolio in 2015, and to further reduce its
commercial spending to MNT 300-400 billion in the next
couple of years due to tight financing conditions. Under
these assumptions, the commercial projects financed by the
DBM are expected to around 3 percent of GDP in 2015, and
decline to 1-1.5 percent of GDP in 2016. |
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