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
Current EBRD forecast for Mongolia's Real GDP Growth in 2018 6.1%
Current EBRD forecast for Mongolia's Real GDP Growth in 2019 6.0%
Economic growth in Mongolia remains solid after a strong recovery in 2017 of 5.1 per cent growth, up from just 1.2 per cent in 2016. In the first half of 2018, GDP growth accelerated to 6.3 per cent year-on-year, boosted by stronger investment in mining and a pick-up in household consumption. Exports increased by 27.2 per cent year-on-year in January-September 2018 but imports grew more strongly at 45.8 per cent year-on-year in the same period reflecting growing domestic demand and imports associated with rising FDI flows.
The economic recovery has resulted in an acceleration of inflation, which rose to 5.7 per cent year-on-year in September 2018 from an average 4.6 per cent in 2017, still below the central bank’s target of 8 per cent. The central bank has maintained the policy rate at 10.0 per cent. External buffers have improved with gross international reserves reaching around US$ 2.9 billion in August 2018, up from US$ 1.6 billion a year ago. Fiscal accounts have also strengthened in compliance with the IMF programme, but also owing to the improved economic performance. The general government budget turned out at a deficit of 1.9 per cent of GDP in 2017, substantially below the 17 per cent deficit in 2016, and was in surplus in 2018 as of September due to the growth in tax receipts. Continued growth of mineral exports and strong FDI inflows are expected to result in GDP growth of 6.1 per cent in 2018 and 6.0 per cent in 2019.