The World Bank has adjusted its 2023 growth projection for Mongolia to 5.8 percent, up from the previous forecast of 5.2 percent. This update comes as a result of robust rebounds seen in the mining sector, private consumption, and increased fiscal spending, as reported by local media on Wednesday.
Mentioning the economy’s notable strength in the first half of 2023, particularly propelled by the mining industry, the World Bank’s latest semi-annual Mongolia economic update highlights continued growth trends in the latter part of the year.
However, there’s a noticeable disparity in growth rates between the mining and non-mining sectors, emphasizing Mongolia’s heavy dependence on mining. The World Bank underscored the importance of ongoing reforms aimed at diversification to fortify the economy against fluctuations in commodity prices.
Taehyun Lee, the World Bank country manager for Mongolia, emphasized the need for sustained reforms, stating, “While the current upsurge in mining exports is improving macroeconomic conditions, it’s essential to focus on reforms that diversify Mongolia’s economy and make it more resilient to commodity price fluctuations.”
The forecast anticipates an acceleration in economic growth, with an average surpassing 6 percent expected between 2025 and 2026. This is attributed to a substantial surge in mineral production, with projections suggesting a doubling of mining output by 2025, primarily driven by the anticipated expansion of the Oyu Tolgoi copper-gold mining project.
Official data from Mongolia’s National Statistics Office indicates a year-on-year economic growth of 6.9 percent in the initial three quarters of 2023.
