The Asian Development Bank (ADB) launched their flagship publication “Asian Development Outlook" on 4 April. During the launch, Mongolia country specific outlook was presented.

In its latest flagship economic report, ADB Outlook April 2023, ADB projects Mongolia’s economic growth to expand to 5.4% in 2023 compared to 4.8% growth in 2022, before climbing to 6.1% in 2024, supported by exports, recovery in mining, and its positive spillover to transport and other pursuits.

Average inflation will moderate to 10.9% in 2023 and 8.7% in 2024 as supply shocks and trade disruption risks wane. However, it will still exceed the central bank target of 6%, mainly on pass-through of local currency depreciation and revived domestic demand. More aggressive fiscal consolidation will support macroeconomic external balance and reduce crowding out impacts on the private sector. The current account deficit is projected to diminish, mainly as merchandise exports increase and the service deficit narrows with lessened trade disruption, lower risk premiums for shippers, and lower transportation service charges.

“After 3 years of economic difficulties induced by exogenous shocks, including COVID-19, border restrictions with the PRC and the Russian invasion of Ukraine, the economy of Mongolia is now on a recovery path, supported by both external demand and domestic policy responses,” said ADB’s Country Director for Mongolia Pavit Ramachandran. “Maintaining growth momentum while reducing the persistently high inflation is critical to ensure that this economic growth is more inclusive.”

Downside risks to the outlook stem from a worsening situation regarding the Russian invasion of Ukraine, new COVID-19 variants or waves, a significant commodity price correction, domestic political risks, and the adverse implications of offtake barter agreements.