Rising Debts and Deficits Threaten Mongolia Economic Growth in New IMF Forecast

The International Monetary Fund's Article IV mission left Ulaanbaatar on June 23 and published its verdict. The prose is courteous. Mongolia economic growth should reach 5.8% this year.

The IMF urged a supplementary budget, restraint on tax cuts and vigilance at the central bank. Concluding statements are drafted to be quotable by finance ministers.

IMF representatives at the Economy and Development Ministry in Ulaanbaatar, Mongolia (med.gov.mn)

The projections table is harder to quote. The Fund's baseline shows the overall balance swinging from a surplus of 1.5% of GDP in 2025 to a deficit of 2.6% this year, then deteriorating in every year of the forecast to reach 6.5% of GDP by 2031.

Government debt climbs from 45% of GDP to 62% by 2031. Gross financing needs rise from 3% of GDP to more than 17%. That is the central projection, not a stress scenario, computed with copper assumed near $13,500 a tonne throughout.

The table supports judgments the communiqué declines to draw. The Fiscal Stability Law caps the structural deficit at 2% of GDP, and the government stays under the cap partly because the oil refinery and the Erdeneburen hydropower plant now sit outside the fiscal rules.

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