ULAN BATOR, Sept. 15 (Xinhua) -- Mongolia's economic contraction is expected to continue to deepen in 2020 due to the COVID-19 pandemic, but it will recover in 2021 as regional economies rebound, according to a report released by the Asian Development Bank (ADB) Tuesday.
In its Asian Development Outlook (ADO) 2020 Update, the ADB projects Mongolia's economic growth to drop 2.6 percent in 2020, a downgrade compared to the 2.1 percent forecast in April and minus 1.9 percent in June, before rebounding to 5.1 percent in 2021.
"Mongolia was able to contain the pandemic but could not avoid the associated economic cost," said Pavit Ramachandran, ADB country director for Mongolia.
"The external economic shock has left the economy in deep recession, and careful management of macroeconomic fundamentals will be required for recovery," he said.
Mongolia's gross domestic product decreased by 9.7 percent in the first half of 2020 mainly because COVID-19 substantially reduced exports and capital inflows, the ADB said, adding that declines in mining, manufacturing, construction, transportation, trade, and services dragged down GDP growth, leaving agriculture as the only positive contributor.
The bank also said that some signs of recovery in neighboring China and a significant rebound of copper and gold prices imply that Mongolia's exports and mining output will pick up in the second half of 2020. Enditem