Mongolia: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Mongolia

International Monetary Fund

No 2021/251, IMF Staff Country Reports from International Monetary Fund

Abstract: A strong export-led recovery is underway. Despite early actions and a successful vaccination campaign, the pandemic is lingering in Mongolia as positivity rates remain high and borders largely closed. An export-led recovery which began in mid-2020, is gathering steam due to booming prices for Mongolia’s exports. Nevertheless, domestic demand, labor markets and the business sector remain weak. Policies were appropriately supportive during the pandemic. However, large, untargeted and continuing fiscal, quasi-fiscal and financial forbearance measures legislated by Parliament have heightened macrofinancial vulnerabilities: public debt has sharply increased, bank balance sheets have further weakened, and the Bank of Mongolia’s (BOM) operational independence has been compromised. On the plus side, external and fiscal buffers have been built, helped by the 2021 IMF SDR allocation of US$98.3 million (95.8 percent of quota), and the rollover of large external liabilities has increased policy space.

Keywords: banking sector reform; policy support; General government debt data; banking sector ownership; IMF SDR allocation; COVID-19; External sector statistics; Exports; Global; Central Asia (search for similar items in EconPapers)
Pages: 115
Date: 2021-11-29
New Economics Papers: this item is included in nep-mac
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