20211128-IMF-Mongolia_2021_Article_IV_Consultation-Press_Release_Staff_Report_and_Statement_by_the_Executive_Director_for_Mongolia_115页_8mb

Mongolia Article IV Consultation: Key Findings

I. Macroeconomic Overview

Mongolia's economy is rebounding from its deepest recession since 2013, driven by favorable global conditions and mining sector recovery. Export-led growth is expected at 4.5% in 2021 and 5% in the medium term. However, the country remains constrained by:

• Lingering pandemic with high positivity rates and female workforce attrition
• Large external vulnerabilities (extreme external debt)
• Financial sector weaknesses and limited banking sector reforms

II. Fiscal Policy Assessment

While fiscal support was appropriate during the pandemic, significant risks emerge from:

• Large public debt (77.5% of GDP in 2020)
• Proposal to permanently extend pandemic-era social transfers
• Inconsistent implementation of fiscal reforms
  Key recommendations:

1. "Double the consolidation pace in post-pandemic budgets through targeted reforms"
2. "Reform pension system (gradual retirement age increase to 65)"
3. "Abolish subsidized mortgage programs by transferring them to budgetary funding"

III. Other Key Areas & Risks

• Banking sector requires well-sequenced reforms to address capital deficiencies
• Anti-corruption measures need stronger implementation
• External buffers remain inadequate despite recent improvements

IV. Outlook & Recommendations

Despite strong export prospects, economic growth remains uncertain due to:

• Potential pandemic resurgence and border closures
• Geopolitical factors affecting trade with China
• Insufficient progress on long-delayed structural reforms

References

• IMF Article IV Consultation Report (November 2021)
• Mongolia Vision 2050 National Development Strategy
• World Bank Country Partnership Framework