According to the National Statistics Office (NSO), in the first quarter of 2020, GDP at current prices decreased by 10.7 percent compared to the same period of the previous year. Analysts estimate that an average contraction reaches 3.9 percent, while the Governor of the Bank of Mongolia (BoM) said it was likely to deteriorate by 7 percent. The mining industry dwindled by 7.6 percentage points in the first quarter as exports fell sharply due to the COVID-19 pandemic. In addition, the transportation and communication sector accounted for 2.1 percentage points of the contraction, wholesale and retail trade for 1.3 percentage points, and net product tax for one percentage point. However, the growth of the agricultural sector had a positive impact on the economic growth of 0.5 percentage points. According to the recent assumption of BoM and the Asian Development Bank (ADB), economic growth is likely to stand at 1.8-2.1 percent by the end of the year. The pandemic was an unprecedented challenge. The slowdown in economic growth has reflected in inflation. Moreover, Moody’s has downgraded Mongolia’s long-term outlook from stable to negative and deficits in current account flow increased swiftly mainly due to the fell in export. The budget deficit was initially set at MNT two trillion but Moody’s doubled its losses to 8.5 percent of gross domestic product.

Published Date:2020-05-21