GDP

Experts warn that in the coming year, the economic crisis may embrace the global market. Mongolia's economy expanded by 8.6 percent in the first quarter of this year and has seen an unprecedented increase in the last few years. This year's growth is expected to decline, according to the Fiscal Framework Statement. As a result, GDP growth is expected to stand at about 6 percent. The Asian Development Bank and the World Bank are slightly optimistic about the GDP growth of Mongolia with 6.3- 6.9 percent growth estimations. The World Bank forecasted Mongolia's GDP to grow 6.5 percent in 2021. Economic growth is expected to be supported by mining, agriculture, industry, and services.

BUDGET

In 2018, the budget revenue totaled MNT 12 billion. According to the National Statistics Office (NSO), the budget stayed the same in the first four months of this year with a surplus of MNT 285 billion. In 2020, the budget deficit is expected to reach MNT 2 trillion, which is 5.1 percent of Mongolia's GDP. The government is planning to reduce this deficit by almost MNT 1 trillion in 2021. Furthermore, the Ministry of Finance estimated a budget deficit of MNT 728 billion in 2022. Experts expect a sharp increase in revenue to reach this target and for the state budget to be profitable by 2023. Budget revenue is forecasted to be MNT 11.1 trillion next year and to reach MNT 13 trillion in 2022. With the implementation of the tax package, it is estimated that the 2020 budget revenue will increase by MNT 1.4 trillion.

DEBT

By 2020, the government's total debt is expected to exceed half of the total GDP at the current pace, up to MNT 22 trillion. It could then potentially reach MNT 24 trillion by 2022. The government expects to repay a total of USD 2.9 billion in 2021-2024. For example, USD 100-150 million out of the USD 500 million debt of Mazaalai bond will be paid from savings and the residual will be re-financed in 2021. The Ministry of Finance Khurelbaatar Chimed has made some agreements on this issue.

In addition, the social insurance fund is also burdening the state budget. This year, MNT 600 billion will be paid to the social insurance fund. This will increase to MNT 750 billion in 2020 and MNT 875 billion in 2022. Reducing the budget deficit and making the social insurance fund independent is essential in reducing the debt burden. Furthermore, the average foreign trade balance for the next three years will cost about USD 1.5 billion, while the inflation rate will remain at 8 percent. All estimations were included in the policy document approved on the Fiscal Framework Statement by the Parliament.