Mongolia Economic Update, November 2013
In 2013, the Mongolian economy is expected to maintain double digit growth due to the start of copper production of the Oyu Tolgoi (OT) mine and expansionary economic policies. Yet, the economy is facing a significant challenge from growing balance...
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/11/18485265/mongolia-economic-update http://hdl.handle.net/10986/16643 |
| Summary: | In 2013, the Mongolian economy is
expected to maintain double digit growth due to the start of
copper production of the Oyu Tolgoi (OT) mine and
expansionary economic policies. Yet, the economy is facing a
significant challenge from growing balance of payments
pressures as the foreign direct investment (FDI) inflow
declines and the mineral exports remain weak. A substantial
balance of payments imbalance stems from a weakening
minerals market but also largely reflects the consequences
of pro-cyclical economic management over the last two years.
Mongolia may also face a downside risk from an uncertain
global economic environment and further dampening of
minerals market. Macro-economic and financial
vulnerabilities are growing due to continuous expansionary
fiscal and monetary policies reflected in significant
off-budget spending and rapid credit growth. The government
took a series of positive measures in recent months to
address the challenges including the adoption of the new
investment law, announcement of a fiscal consolidation plan,
and subsequent amendment of the 2013 budget to tighten
budget spending. Yet, further efforts are needed to shift
the growth-oriented economic policies toward economic
stability and rebuilding macro-economic policy buffers, in
light of uncertain prospects in the external environment and
the balance of payments situation. |
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