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Add to Preferred SourcesThe World Bank’s Board of Directors approved US$100 million in financing to help Mongolia further stabilize its economy and move it towards a more sustainable development path.
Mongolia’s economy has recovered strongly from the brink of a macroeconomic crisis in 2016, but underlying vulnerabilities remain. The economy grew by 6.9 percent in 2018, compared to 1.2 percent in 2016. The country’s fiscal position has improved substantially, as the deficit declined from 16.4 percent of GDP in 2016 to a surplus of 2.7 percent in 2018, resulting in a reduction of Mongolia’s government debt to GDP ratio by nearly 13 percentage points over this period. Poverty increased during the economic slowdown of 2014-16 and declined again only moderately during the subsequent recovery, pointing to continued challenges in the labor market and the need for stronger social support policies.
“The reforms supported by this operation are critical for sustaining economic growth, improving public finances, and enhancing competitiveness. Their adoption shows the government’s commitment to continue structural reforms in Mongolia. The World Bank will continue to work with the government and with other international development partners in support of Mongolia and the Economic Recovery Program, ” – said Martin Raiser, Country Director for China, Mongolia and Korea.
The program seeks to restore the country’s debt sustainability by consolidating the adjustment already achieved and addressing structural weaknesses in the management of public sector finances. This includes improving the tax system and public investment management, helping to reduce the costs of ongoing investment projects, and tightening the management of special funds financed from the state budget.
Another focus area is to strengthen the social protection system for poor and vulnerable groups, by promoting employment creation outside the mining sector and better targeting of social policies.
Original source: World Bank
Published on 30 July 2019