Mongolia: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Mongolia
IMF Staff Country Reports, September 17, 2019
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- Mongolia: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Mongolia
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Bibliographic details
- Published: September 17, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513514161.002
Economic performance and recent developments
- Economy growth accelerated to 8.6 percent in the first quarter of 2019.
- Overall fiscal balance turned into surplus in 2018.
- Gross international reserves have increased by $2 1/2 billion since 2016.
- The recovery stems from a stronger policy framework, significant official financing and a rebound in external demand.
Structural reforms and governance
- Structural reforms progressed in several key areas:
- The budget process is more resilient to political pressure.
- Quasi-fiscal activities were curtailed.
- To achieve sustainable and inclusive growth, it is necessary to advance reform efforts by:
- Strengthening the rule-based fiscal policy framework.
- Ensuring financial sector soundness.
- Improving governance.
Vulnerabilities and financial sector concerns
- Mongolia remains vulnerable to external shocks given:
- High debt levels.
- The economy’s dependence on mineral exports.
- Financial sector risks include:
- Still inadequate capital buffers at some banks.
- Overindebted households that could amplify a slowdown into financial instability.
Risks and downside scenarios
- Risks are tilted toward the downside in the near term.
- Specific shock scenarios noted:
- Shocks to mineral demand can lead to sharp fall in exports, weakening growth outlook and fiscal accounts.
- A slowdown in growth could trigger financial instability given the identified banking and household vulnerabilities.
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