Ulaanbaatar/MONTSAME/. The Monetary Policy Committee of the Bank of Mongolia (BoM) has issued a decision to lower the policy rate by one percentage point bringing it to 8 percent and introduce long-term repo financing, reported the authorities of the BoM at the press conference on September 14.

This decision targets to increase the amount of loans to be issued from banking sector to real economic sector and create a condition to lower loan interest, in consideration of the current state of the economy and financial markets, future prospects, and uncertainties and risks in the external and internal environment. The decision and following actions are expected to encourage to meet the inflation target, slow down the economic fall and stimulate the recovery, noted G.Enkhtaivan, Vice President of BoM.

Annual headline inflation fell down to 2.1 percent nationwide and 1.7 percent in Ulaanbaatar city as of August 2020. Inflation will increase slightly over the next months due to the base period, but is likely to remain at its current low level and not to exceed the target level in the coming years. Due to the COVID-19 pandemic, the country’s economy has shrank by 9.7 percent in the first half of 2020, the sharpest plunge in the past 20 years. However, the economic downturn is anticipated to subside in the second half of this year and begin to recover next year due to monetary and financial policy actions and the recovery of external environment.

G.Enkhtaivan added, “The COVID-19 pandemic caused a sharp downturn in the global economic activity in the first half. From the second half, it has been seen unstable, but shows a quite improvement, being affected by stock market prices, mineral prices and trade activity. However, economic uncertainty continues as domestic and external economic prospect depends on the control of the virus spread. A step by step proper monetary and macroprudential policy measures being taken to mitigate the impact of the pandemic helps slow down domestic economic downturn and maintain the stability of banking sector. Even further, we will work to support the solvency of banks, households and businesses, and prevent credit disruptions in the banking system.”

Ulaanbaatar/MONTSAME/. At the end of August 2020, the total amount of outstanding loan to entities and individuals amounted to MNT 17.4 trillion, increased by MNT 53.2 billion (0.3%) from the previous month, while it is decreased by MNT 876.9 billion (4.8%) from the same period of the previous year. In the total outstanding loans, MNT 8.8 trillion (50.7%) was individual loans.

The performing loans reached MNT 14.3 trillion at the end of July 2020, increased by MNT 30.0 billion (0.2%) from the previous month, while it is decreased by MNT 1.1 trillion (7.1%) from the same period of the previous year. The performing loans make up 82.1% of the total loans, and decreased by 2.0 percentage points from the same period of the previous year.

At the end of August 2020, the principals in arrears amounted to MNT 1.1 trillion, decreased by MNT 0.3 billion (0.03%) from the previous month, while it is increased by MNT 153.7 billion (15.6%) from the same period of the previous year. The principals in arrears make up to 6.5% of the total loans, increased by 1.1 percentage points from the same period of the previous year.

At the end of August 2020, the non-performing loans in the banking system amounted to MNT 2.0 trillion, increased by MNT 22.9 billion (1.2%) from the previous month and MNT 53.3 billion (2.8%) from the previous year. The non-performing loans in the banking system make up 11.3% of the total loans, increased by 0.8 percentage points from the same period of the previous year.

The principal arrears in commercial banks and Mongolian Mortgage Corporation /MMC/ reached MNT 4.7 trillion at the end of July 2020, increased by MNT 6.0 billion (0.1%) from the previous month, and by MNT 236.1 (5.2%) billion from the same period of the previous year.

Source: National Statistics Office

Mongolia's economic contraction is expected to continue to deepen in 2020 due to the COVID-19 pandemic, but it will recover in 2021 as regional economies rebound, according to a report released by the Asian Development Bank (ADB) Tuesday.

In its Asian Development Outlook (ADO) 2020 Update, the ADB projects Mongolia's economic growth to drop 2.6 percent in 2020, a downgrade compared to the 2.1 percent forecast in April and minus 1.9 percent in June, before rebounding to 5.1 percent in 2021.

"Mongolia was able to contain the pandemic but could not avoid the associated economic cost," said Pavit Ramachandran, ADB country director for Mongolia.

"The external economic shock has left the economy in deep recession, and careful management of macroeconomic fundamentals will be required for recovery," he said.

Mongolia's gross domestic product decreased by 9.7 percent in the first half of 2020 mainly because COVID-19 substantially reduced exports and capital inflows, the ADB said, adding that declines in mining, manufacturing, construction, transportation, trade, and services dragged down GDP growth, leaving agriculture as the only positive contributor.

The bank also said that some signs of recovery in neighboring China and a significant rebound of copper and gold prices imply that Mongolia's exports and mining output will pick up in the second half of 2020. Enditem

The final report of the UNESCO Education Policy Review for Mongolia will be officially launched in Ulaanbaatar, Mongolia. Mr. Tapan Mishra, UNRC in Mongolia, will formally present on behalf of UNESCO, both the English and Mongolian volumes of the Report to Ms. Tsedevsuren Lkhagva, Mongolia Minister of Education and Science. The international Development Partners in Mongolia, the policy section of UNESCO HQ, UN Agencies, and education institutional stakeholders are expected to attend the launch of the Report.

In 2018, the Ministry of Education and Science (MoES) officially requested UNESCO to conduct a comprehensive Review of the education sector challenges and to use the key policy recommendations to reform and restructure the education system that is equitable, inclusive, quality and lifelong learning.

In close partnership with MoES, UNESCO supported Mongolia in conducting the Education Policy Review from 2018-2019. The Education Policy Review took a comprehensive, lifelong learning approach and involved in-depth work and studies on specific policy domains and issues, benefitting from national, regional and international evidence and experience. UNESCO closely collaborated with MoES, education stakeholders, Mongolia Institute for Education Research (MIER), UNESCO IIEP, UNICEF Country Office in Mongolia, ADB, World Bank, JICA, and other Development Partners to provide invaluable inputs to the Education Policy Review Team.

The Education Policy Review was a critical analysis of the Education Sector and an in-depth assessment of the policies and programmes aligned with the development aspirations of the Mongolian Government within the framework of the Education 2050 vision and sustainable development strategy of Mongolia and Mongolia Education Medium Term Development Plan (ESMTDP) 2021-2030.

Consistent with SDG4-Education 2030, this Report adopts a lifelong learning as a guiding principle and it takes a comprehensive, system-wide, approach to education. Both are reflected in the structuring of this Report according to the three thematic priorities. This Report combines national and international knowledge and expertise, and takes into consideration relevant research and analysis, reports, statistics, and discussions with a wide range of stakeholders and development partners during a series of field visits.

The report is produced in English and Mongolian language and can be directly accessed on-line on the UNESCO website.

Yesterday (14 September), two more people were discharged from the National Centre for Communicative Diseases after having fully recovered from the coronavirus infection that has killed over 928,000 people in the world.

As of today, Mongolia has reported 310 confirmed cases of coronavirus; 300 of them have fully recovered. Currently, 10 patients suffering from the coronavirus infection are under treatment at the NCCD; four of them are in a critical state.

Mongolia is one of few countries that have no local transmissions of COVID-19.

Mongolia’s frontier market and vast mineral reserves represent potentially lucrative opportunities for investors, but a high-risk macroeconomic environment and lack of input from stakeholders during rulemaking warrant caution. Mongolia’s economic model of exporting minerals and importing most other goods means the government imposes few market-access barriers. Investors also face few investment restrictions in Mongolia, enjoying mostly unfettered access to the market. Franchises such as gyms, fast food, and convenience stores have outperformed expectations, suggesting investors can bring successful international business models to Mongolia’s services sector. Mongolia’s cashmere and agricultural sectors also show strong promise. However, investing into politically sensitive sectors of the Mongolian economy – such as mining – carries higher risk.

A COVID-19-related ban on entry of foreigners into Mongolia and prohibition on passenger flights will complicate investment decisions for as long as these measures remain in effect. Hazardous air pollution during the winter may hamper efforts to attract top talent, although the government made substantial progress in 2019 addressing it.

Economists predict a one-percent contraction in GDP in 2020 as COVID-19’s effects have substantially hurt Mongolia’s services sector, which accounts for 39 percent of GDP – assuming a V-shaped economic rebound in the second half of 2020. Despite experiencing declines, mining and agriculture have been relatively resilient in the face of the pandemic, meaning Mongolia’s broader economy should emerge less damaged than some of its peers. Public debt is projected to reach 77 percent of GDP in 2020, and Mongolia faces a series of sovereign debt payments to external commercial creditors beginning in 2021 that may create balance-of-payments stress. Although Mongolia implemented policy measures that substantially reduced economic vulnerabilities under a three-year International Monetary Fund (IMF) program, the program unsuccessfully ended in May 2020 after the government failed to address IMF macroprudential concerns regarding the banking sector.

Mongolia has committed to implementing the U.S.-Mongolia Agreement on Transparency in Matters Related to International Trade and Investment (known as the Transparency Agreement), which requires a public-comment period before new regulations become final. It also requires ministries to respond to public comments or factor them into final rules. Mongolia is three years behind implementing its Transparency Agreement public-notice and comment commitments, raising questions about the seriousness of the government’s efforts to promote foreign investment in Mongolia.

Mongolia’s judicial system has shown signs of offering investors protection, but 2019 reforms that simplified the removal of judges, prosecutors, and anti-corruption officials raised questions regarding judicial independence. In November 2019 parliament adopted constitutional amendments designed in part to address these concerns. Investors cite long delays in reaching court judgments in business disputes, followed by similarly long delays in enforcing these decisions. There are also reports of long delays by administrative inspection bodies, such as the tax authority, which in the past have failed to act on politically sensitive decisions. Businesses note a substantial regulatory burden at the regional level as well, although the government’s “One-Stop Shop for Investors” has helped investors navigate this process.

Please see the full article on https://mn.usembassy.gov/2020-investment-climate-statement-mongolia/

Mongolia reported that two more people had recovered from COVID-19 in its latest count, taking the total number of recoveries in the country to 300, the country's National Center for Communicable Diseases said in a statement on Monday.

The center said that 11 COVID-19 patients are now being treated in Mongolia, four of them in severe condition.

All the 311 confirmed cases in Mongolia were imported, and no local transmissions or deaths have been reported in the country so far. Enditem

In late August, the Wealth Creators Support Association (WCSA) of Mongolia and Mongolian Artisan Cheesemakers Union (MACU) LLC signed a memorandum of cooperation to jointly build 100 cheese plants across the country with the aim of creating new jobs, increasing the value of milk supplied from herders, and bringing the dairy product to international markets, Montsame reported.

WCSA President Ch.Dalaibayar said the 100 cheese factory project also aims to satisfy domestic cheese demand and export the surplus.

MACU Executive Director Michael Morrow said the project is expected to contribute to Mongolia’s development and is especially benefitial for herders. Domestic milk processing and cheese production will not only play an important role in increasing income of herder households, but also encourage sustainable growth, he said.

The Mongolian government on Monday decided to extend the country's heightened state of readiness until the end of October amid the COVID-19 pandemic.

"Today, the government decided to extend the country's heightened state of readiness until the end of next month. The extension is part of efforts to prevent the spread of the coronavirus," Tseden-Ish Ganzorig, head of the government's press office, told a news conference.

During the period of the heightened state of readiness, Mongolia will not open its borders and not allow in commercial international flights, said Ganzorig.

However, as no local transmissions of the virus have been reported in Mongolia, the government decided to resume normal business activities and mass gatherings such as sports events and cultural activities starting from Wednesday, he said.

The Asian country has confirmed 311 COVID-19 cases so far, with no local transmissions or deaths.

It entered its heightened state of readiness on Feb. 12, with measures including the suspension of international passenger flights.