Mongolian economy on its way to recovery
Speaking at a parliamentary session Prime Minister J.Erdenebat reported that the economic recession had ended and the basis for further development has been laid.
Mongolian economy on its way to recovery. Speaking at a parliamentary session Prime Minister J.Erdenebat reported that the economic recession had ended and the basis for further development has been laid. The Prime Minister detailed how the local economy that once had an annual GDP growth of 17 percent had been derailed, registering nearly 2 percent shrink in GDP in the third quarter of the past year. By the end of 2016, GDP growth had reached 1.2 percent and further surged to a surprisingly more than 4 percent growth in the first quarter of 2017. With the help of the IMF extended fund facility program, the foundation for economic growth has been laid. 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 this year. In comparison, the first quarter of 2016 saw a GDP growth of 3.2 percent. The biggest contributors to the growth were increases in production in agriculture, services, and construction. On the other hand, the growth in the mining and manufacturing sectors had declined. Mongolia plans to cap the state debt at 60 percent of GDP by 2021 and even lower in 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 in May this year. After the implementation of the program, Mongolia will receive a soft loan of 434.3 million USD from the IMF to help stabilise the local economy and support the economic reforms, the Prime Minister said.