The European Bank for Reconstruction and Development (EBRD) has released its latest economic forecasts for Mongolia, and the outlook is positive. Mongolia’s economy is expected to maintain its impressive growth momentum in both 2023 and 2024, with growth rates of 7.2 percent and 7.5 percent. These projections align with EBRD’s earlier assessments made in May, indicating a sustained upward trajectory for the nation’s economy.
One of the pivotal factors driving Mongolia’s economic expansion is the demand from China for its commodities, a point underscored by the EBRD. Mongolia exported 34 million tonnes of coal in the first seven months of the year, marking the highest level since the onset of COVID-19-related trade restrictions. Furthermore, the launch of new rail lines connecting the Tavan Tolgoi coal deposits with China is poised to amplify trade between the two nations, providing an additional boost to Mongolia’s GDP growth.
Additionally, underground mining at Oyu Tolgoi, one of the world’s largest copper and gold deposits, commenced in March of this year. This was widely considered a milestone achievement for the Mongolian government, which owns 34 percent of the project, promising substantial economic benefits in the long term.
Moreover, EBRD has emphasized the recovery of the tourism sector, which has bounced back to full strength, bolstering the performance of the hospitality and cashmere industries. However, EBRD does caution against some notable downside risks. The tightening of global credit conditions could pose challenges to Mongolia’s growth trajectory, and a potential slowdown in China, a major trading partner, remains a concern that could impact Mongolia’s economy.