Mongolia has significant potential for economic growth with its abundant natural resources and a young and dynamic population. But the large fall in commodity prices from 2011 and slower growth in China, exacerbated by loose fiscal discipline, resulted in economic growth falling from 17 percent in 2011 to 1 percent in 2016, the budget deficit soaring to 17 percent of GDP, unemployment rising to double digits, depleting international reserves and resulting in high public debt.
These were the economic conditions faced by the Government when it took office in July 2016. They have since embarked on an ambitious and challenging economic recovery program supported by a very constructive dialogue with the Fund on designing an economic recovery plan with policies to address Mongolia’s economic difficulties. The Mongolian authorities thank staff for a very constructive and comprehensive dialogue during the program negotiation. Authorities are in broad agreement with the staff’s well-balanced assessment of the economic situation and outlook and are firmly committed to implementing the policy recommendations.