New Delhi: The International Monetary Fund (IMF) advised the Mongolian government to tighten its fiscal policy to manage the current commodity boom effectively.
In its concluding statement of the 2024 IMF Staff Visit, the IMF said the government should build external and fiscal buffers to create necessary policy space to implement the ambitious investment program and other reforms in line with the economy’s absorptive capacity while maintaining external and internal balance. An IMF team visited Ulaanbaatar to conduct the discussions between 25 September and 1 October.
The IMF praised the government’s introduction of a nominal debt ceiling with strong deterrence as a major and welcome step forward. It welcomed planned and overdue energy tariff reforms, essential for a reliable national energy supply.
“Well-executed external debt refinancing and the BOM’s repayment of half of the outstanding PBOC swap line have reduced external debt risks, resulting in a sovereign credit ratings upgrade,” the statement read.
The IMF expects Mongolia’s economic growth to remain robust in 2024-25, reflecting strong mining sector growth, bolstered by the increased production of higher-grade copper and stronger coal exports to China, and the expansionary, and procyclical 2024 supplementary and draft 2025 budgets.