Economic Prospects

GDP growth is expected to remain very high in coming few years supported by high mineral prices, new mining projects, structural reforms and fiscal spending. Mongolia will continue to benefit considerably from commodity export, mostly coal and copper.

Mongolia’s economy recorded another period of double-digit growth in 2013. The high economic growth was due to stronger mineral production led by the start of production in the Oyu Tolgoi mine and the government’s stimulus policy.

Yet, the economy has become increasingly vulnerable due to large external imbalances, significant off-budget spending, and rapid credit growth, amidst an uncertain external environment.
Medium-term prospects remain promising given Mongolia’s potential to develop its natural resources. Economic growth is forecast at 9.5% in 2014, driven in particular by the start of copper production at the Oyu Tolgoi open pit in June of last year. Economic growth is expected to pick up slightly to 10% in 2015, spurred by further development in mining, including the possible development of the Oyu Tolgoi underground mine and an expansion of coal production from the Tavan Tolgoi mine. Non-mining growth is expected to accelerate as restrictive economic policies are eased and FDI flows are assumed to partly recover.