ADB has warned that fuel and exchange rates could rise
The Asian Development Bank (ADB) today (April 28, 2021) presented its “Asian Development Outlook” report. In its “Asian Development Outlook” report for 2020, the bank forecast that Mongolia’s economic growth in 2021 will be 4.6 percent, but this time it has raised its forecast to 4.8 percent.
Although vaccination has begun, the effects of the pandemic have not completely disappeared, and domestic demand is unlikely to recover sharply due to high public health risks, and ADB expects economic growth to reach 5.7 percent next year. Inflation and the current account deficit, rising fuel prices, the exchange rate, and the cost of importing goods and services are likely to rise, indicating rising commodity prices.
Mongolia’s GDP growth slowed to 5.3 percent last year. The central bank’s official foreign exchange reserves reached $ 4.5 billion. Although foreign exchange reserves have reached historic highs, the risk of the togrog depreciating and the pressure to expand the trade deficit are expected to continue. Given the economic situation in the region, China’s economic recovery is expected to accelerate and demand for mining products will increase.
ADB noted that Mongolia’s economic growth of 4.8 percent this year is mainly due to the results of its southern neighbor’s economic support policy and the growth of domestic lending under the 10 trillion domestic program and the pandemic situation.
He reiterated that there is a real risk that the effects of the pandemic will last longer, that vaccinations will be slower than planned, that the investment climate will deteriorate, and that funding for 10 trillion programs will be blocked.