Economic growth of Mongolia expected to be 4.3 percent in 2021

2021-01-12 16:23:40

Ulaanbaatar /MONTSAME/ Mongolia’s economy is expected to grow by 4.3 percent in 2021 - 0.6 percentage point below the previous forecast by Global Economic Prospects report released by the World Bank.

The policy response to the pandemic led to a sharp increase in fiscal deficits in the region. To cover the additional financing needs, several governments have used domestic borrowing (China, Indonesia, Myanmar, the Philippines). Others relied more on external financing (Fiji, Mongolia, Palau, Papua New Guinea).

Combination of public support and slowing activity has raised regional public debt by an estimated 7 percentage points, to 50 percent of GDP on average in 2020 and above 60 percent of GDP in Lao PDR, Malaysia, and Mongolia. Total public and private debt in the region surpassed 100 percent of GDP in two-thirds of regional economies and reached nearly 300 percent of GDP in China and Mongolia.

Growth in the region is projected to accelerate to 7.4% in 2021, led by a rebound in China. This is predicated on the rollout of an effective vaccine in the first quarter of 2021 in major economies and later in smaller emerging market and developing economies. Nevertheless, economic activity in the region is expected to remain below pre-pandemic trend by late 2021, reflecting lasting damage from the COVID-19 shock. Investment and productivity are expected to remain depressed and uncertainty is likely to remain elevated.