The Asian Development Bank (ADB) forecasts that the Mongolian economy will continue to grow steadily until the end of 2025.

MONGOLIA, ULAANBAATAR (September 25, 2024) — With increased foreign demand, domestic consumption, and government spending, the Mongolian economy is experiencing stable growth. As a result, the Asian Development Bank (ADB) has raised its forecast for the country's 2024 Gross Domestic Product (GDP) growth.

In its September 2024 Asian Development Outlook report, the ADB predicts that Mongolia's economy will grow by 5.5% in 2024.

This increase is from an earlier forecast in April, which projected a 4.1% growth. However, the 2025 economic growth forecast remains unchanged at 6.0%. The growth will continue to be supported by the services and industrial sectors, particularly the mining sector. Additionally, the agricultural sector, which saw a sharp decline in the first quarter of this year, is recovering, and with the increase in budgetary spending, economic activity is expected to rise in the coming year.

"The continued economic growth of Mongolia in the first half of 2024 is a positive development. It is crucial to direct this growth cycle towards building reserves to protect against potential shocks and to make investments that support broad-based and diversified economic growth," said Shannon Coilin, Resident Representative of the Asian Development Bank (ADB) in Mongolia.

Due to faster-than-expected growth in mining production, the economic growth of Mongolia this year is higher. As mining exports increase, for example, coal exports in the first half of 2024 rose by 37.6% compared to the same period last year, contributing to higher budget revenues, growth in service sectors, and particularly growth in freight transport. Additionally, inflation has decreased, and public sector wage increases have boosted domestic demand, further supporting economic growth.

Inflation has noticeably decreased and is within the central bank's target range. Consumer prices are expected to rise by 6.8% in 2024, which is slightly lower than the forecast in April. However, inflation is expected to rise to 7.2% in 2025, higher than previously anticipated, due to increased domestic demand and higher government spending.

Risks that may lower the forecast include reduced demand for Mongolia's raw material exports to the People's Republic of China, potential delays in mining production at the Oyu Tolgoi mine, geopolitical tensions, a decline in commodity prices due to climate impacts, and disruptions to supply chains.

The ADB continues its efforts to eradicate poverty in the Asia-Pacific region while working steadily to foster inclusive, sustainable, and resilient development in the region. Established in 1966, the ADB has 68 member countries, 49 of which are located in this region.