Mongolia's economic recovery continues on strong growth
Mining investment will continue but a slowdown in the growth of mining investment, however, is expected to temper 2019 gross domestic product growth.
In its annual economic publication, Asian Development Outlook by Asian Development Bank (ADB), Mongolian economy posted strong growth in the first half of 2018 at 6.3 percent, continuing the strong economic performance of 2017, on the back of a robust expansion in investment in the mining sector as well as a surge in consumption propelled by a rise in credit to households. ADB is revising its growth outlook for Mongolia to reach 6.4 percent in 2018 and 6.1 percent in 2019, exceeding its April estimates of 3.8 percent growth this year and 4.3 percent next year. This upward revision is based on a better performance of coal exports and stronger than expected private consumption. Mining investment will continue but a slowdown in the growth of mining investment, however, is expected to temper 2019 gross domestic product growth. On the supply side, industry, supported by a recovery in mining and expansion in manufacturing, lifted GDP growth and services added some more points. Agriculture's contribution to growth, however, fell as drought brought livestock losses. The Mongolian tugrug depreciated against the US dollar in the first 8 months of 2018 but rose against the currencies of trading partners in both trade-weighted and inflation-adjusted terms. Inflation accelerated to average 6.5 percent in the first half of 2018, mainly because food prices rose with drought and higher exports of meat, but also reflecting higher prices for petroleum products. The inflation forecast for 2018 is revised down as pass-through from currency depreciation in 2016 fades, and with the government expected to follow its annulment of excise taxes on fuel with further interventions to stabilize fuel prices.
Views: 1055
Tweet