This statement contains information that has become available since the staff report was circulated to the Executive Board. It does not alter the thrust of the staff appraisal.
1 The latest available data confirm that recent macroeconomic developments are broadly in line with staffs expectations.
Following particularly strong growth in 2019Q1 (8.6 percent), real GDP growth decelerated to 6.5 percent in 2019Q2 reflecting a slowdown in external demand.
Annual consumer price index inflation (7.7 percent y-o-y in July) continues to hover around the Bank of Mongolia’s (BOM’s) target of 8 percent.
The year to date primary balance reached 4.7 percent of GDP in July (in line with the performance during the same period in 2018) largely due to strong revenues.
Credit growth continued to decelerate, reaching 17.1 percent in July, down from 26.5 percent at end-2018.
Foreign exchange reserves fell in July ($167 million in net terms) before stabilizing in August. According to the Bank of Mongolia, the primary reason was a seasonal increase in foreign exchange demand.