Mongolia overview

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Green landscape in Mongolia

Mongolia became an EBRD country of operations in 2006. The EBRD supports Mongolia in its transition to a full market economy and is currently the largest foreign investor in the country. All projects that we have supported have been in the private sector and almost all of these involve local entrepreneurs or banks.

One of the priorities for the EBRD in Mongolia is to support infrastructure projects with private sector participation, including public-private partnerships (PPPs).

The main priorities of the EBRD's work in Mongolia are:

Diversification: The EBRD will aim to expand its engagement with the non-extractive private sector.

Sustainable growth: We support the financial sector through small and medium-sized enterprise (SME)-debt programmes, equity and technical assistance.

Responsible mining and institutions: The EBRD continues to offer debt and equity finance to reputable mining companies which meet its high standards and will support institutional building. All of our support in the mining sector has thus far been directed to local enterprises.

Infrastructure and private sector development: The EBRD supports Mongolia's infrastructure-building "including through the development of renewable energy“ and promotes private sector involvement where possible.

The EBRD's latest Mongolia strategy was adopted on 7 June 2017

Mongolia's policy response to the coronavirus crisis

The EBRD is monitoring Mongola's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

Current EBRD forecast for Mongolia's Real GDP Growth in 2021 6.3%

Current EBRD forecast for Mongolia's Real GDP Growth in 2021 6%

Having absorbed large losses from early lockdowns and border closures (starting from February 2020), Mongolia recorded real GDP growth of 15.7 per cent year-on-year in the first quarter 2021 thanks to a very low base. Growth was driven by China’s recovery and elevated commodity prices.
 
Exports rose by 81.8 per cent year-on-year in the first four months of 2021 thanks to strong performance in iron ores and concentrates, copper concentrates and coal. Overall, mining output increased 34 per cent year-on-year. Services grew by a much more modest 3.6 per cent year-on-year. With the economy recovering, inflation accelerated to 5.6 per cent in April 2021 from the low of 2.3 per cent in December 2020.
 
However, the policy rate has been kept unchanged at 6.0 per cent since November 2020, supporting credit expansion (up 3 per cent year-on-year in March 2021). Fiscal policy will be supporting growth in 2021 with the budget deficit planned at 5.1 per cent of GDP. A large stimulus package is envisaged for 2021-23, estimated at 5 per cent of GDP, to be mainly financed by the central bank.
 
Still, the government’s ability to continue to redistribute income from the mining sector will be constrained by the elevated level of public debt (76.6 per cent of GDP at the end of 2020), and large bond maturities in 2021-24 (equal to roughly half of international reserves).
 
Overall, Mongolia’s GDP is expected to grow by 6.3 per cent in 2021 and 6.0 per cent in 2022, supported by China’s demand for Mongolia’s key exports, private and public consumption, and recovery of investment, contingent on a successful conclusion of the negotiations over Oyu Tolgoi, Mongolia’s largest foreign direct investment financed project.
 
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