Development Challenges

Mongolia faces significant development challenges as a landlocked country. The extreme weather conditions and constant threats to the natural environment make proper planning essential. Approximately one third of the population lives below the poverty line. Mongolia’s National Development Strategy is set out in two phases: 2007–2015 (developing the country’s economy) and 2016–2021 (making a transition to knowledge-based economy).

Increasing the workforce participation rate and encouraging overseas Mongolians to return home would ease structural adjustment pressures. Prospective fiscal policy would have deeper impacts on economic growth. Reduction in government spending could result in squeezing the economy, lower property prices, higher NPL ratio, and exchange rate volatility. Mongolia traded its Government Bond namely Chinggis worth of 1.5 billion USD  in November 2012, whereas 5-year bond worth of 500 million USD was sold at its launch price of 4.125% yield and 10-year bond worth of 1 billion USD was sold at 5.125%. It will be paid under schedule and the principal amount of 500 million USD should be paid back in 2017, and the 1 billion USD should be repaid fully in 2022. However, because of the continued fiscal deficit situation, it is not certain whether Government can pay back the debt or not. 

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