This Selected Issues paper analyzes economic development in Mongolia during 1997–99. Economic performance in 1997 was impressive. Aided by strong political support for rapid reform and a generally favorable external environment, financial policies were tightened, and significant reductions in inflation were achieved. Broad-based structural reforms were also undertaken, including steps to restore confidence in the banking system. However, conditions changed abruptly in 1998 as deterioration in the external environment and domestic political problems combined to erode the momentum for reform.
This 2006 Article IV Consultation highlights that Mongolia’s macroeconomic performance in 2005–06 has been robust, underpinned by a run-up on copper and gold prices, declining inflation, and budget and external current account surpluses. Real GDP growth in 2005–06 is estimated at 7 percent, in line with the average pace since 2002. The mineral sector has been a key engine of growth, supported by favorable weather conditions, and buoyant recovery in the construction and services sectors. Mongolia’s medium-term outlook for sustained growth and poverty reduction is broadly favorable, but subject to risks.
This paper presents an update to the Report on the Observance of Standards and Codes (ROSC) on Fiscal Transparency for Mongolia. Since the publication of the ROSC in late 2001, Mongolia has made significant progress in enhancing transparency practices in the fiscal area. Actions have been taken under each of the four areas underlying the fiscal transparency code. A new Public Sector Management and Finance Law (PSMFL) was adopted in June 2002 to set the legal basis for public administration reforms, output budgeting, and accrual accounting.
Mongolia has performed commendably under the Poverty Reduction Growth Facility arrangements. Executive Directors commended the prudent macroeconomic policies, low inflation, and reduction in vulnerability. They stressed the need to strengthen the fiscal position, improve economic governance, pursue prudent monetary and external debt management policies, and maintain an open trade and investment regime. They agreed that Mongolia's Economic Growth Support and Poverty Reduction Strategy (EGSPRS) provides a sound basis for IMF’s concessional financial assistance, and approved further finance assistance.
This paper focuses on proposed Stand-By arrangement (SBA) for Mongolia. This proposed SBA would aim to smooth adjustment to the catastrophic terms-of-trade shock, restore health to the country’s fiscal finances, and allow for exchange rate flexibility in line with market conditions. In addition, the IMF program would outline a clear macroeconomic framework to provide the basis for the authorities to approach the broader international community for financial support. Monetary policy will be calibrated to lower inflation while maintaining a flexible exchange rate and safeguarding international reserves.
The report provides the details of the assessment on Mongolia’s Poverty Reduction Strategy Paper. It describes the Economic Growth and Poverty Reduction Strategy (EGPRS), which presents main policy directions of the government with a focus on economic growth acceleration and poverty reduction efforts. It describes the transition period of Mongolia, demographic trends drawn from the household income and expenditure survey, the poverty situation, gender inequality, and poverty reduction strategy. It also reviews the promotion of economic and financial stability and provides a strategy for monitoring the policies.
This paper discusses key findings of the Ex Post Assessment of Longer-Term Program Engagement for Mongolia. The paper assesses Mongolia’s progress in implementing its transition to a market economy, economic stabilization, and reform programs supported by the IMF during 1991–2004, and draws lessons for future IMF involvement. Assessment reveals that macroeconomic stability has been broadly achieved in Mongolia, with growth restored and inflation generally under control. Much of the state structure has been privatized or updated, and the economy and export base have diversified. However, the economy still remains vulnerable to shocks.
This paper describes economic developments in Mongolia during the 1990s. Real GDP growth accelerated to 6 percent in 1995, the second year of positive growth since the transition to a market economy commenced. The main impetus to growth was again provided by the strong performance of agriculture, industry, mining, and construction. There was a record increase in livestock population, mainly in the more valuable cashmere goats. The number of new private industrial enterprises continued to grow, while ownership and management changes at some large state-owned enterprises helped stem the decline of output in that sector.