Mongolia posts 6.9% economic growth in 2018

Mongolia’s economy grew 6.9 percent in 2018, beating expectations and accelerating from a 5.3 percent pace the previous year, the statistics office said on Friday.

An increase in foreign trade revenues, particularly from resources such as coal and copper helped drive the expansion, which was higher than an Asia Development Bank forecast of 6.3 percent.

“Increased mineral export revenues due to the higher commodity prices, and improved domestic demand, helped Mongolia’s economy perform better than expected,” said Lakshmi Boojoo, director of the Economic Policy and Competitiveness Research Center in Mongolia, an independent think tank.

Coal and copper generate almost 70 percent of Mongolia’s total export revenues. Most of its mining output is sold to neighboring China.

Mongolia’s total trade turnover rose 22.3 percent last year to hit $12.9 billion, with exports at $7 billion and imports $5.9 billion.

The 2017 growth rate was revised up from the previous 5.1 percent.

After double-digit expansion from 2011-2013, driven by a mining boom, Mongolia’s growth plummeted to just 1.2 percent in 2016 following a collapse in foreign investment and commodity prices.

It was forced to turn to the International Monetary Fund for assistance in 2017 amid heavy government debt and a collapse in the value of its currency, the tugrik. The two sides agreed to a three-year restructuring programme that committed the government to spending cuts and financial reforms.

The IMF warned last year that while Mongolia was recovering more quickly than expected, it remained heavily in debt and vulnerable to commodity price fluctuations, and needed to maintain its commitment to structural reform.

(By Munkhchimeg Davaasharav and David Stanway; Editing by Simon Cameron-Moore & Kim Coghill)