ULAN BATOR, April 28 (Xinhua) -- Mongolia's economic growth is expected to recover gradually in 2021 and accelerate in 2022 as the COVID-19 pandemic risks fade and the global recovery strengthens, said a new Asian Development Bank (ADB) report released on Wednesday.
The ADB in its Asian Development Outlook 2021 report said that Mongolia's economic growth is projected to recover to 4.8 percent in 2021 compared to the 5.3 percent contraction in 2020 before climbing to 5.7 percent in 2022, boosted by domestic demand, investment, increased private credit, and a full recovery across economic sectors.
Pavit Ramachandran, ADB country director for Mongolia said that as Mongolia faces elevated health risks for the population, it needs to ensure a proactive management of the pandemic and secure access to vaccines.
Mongolia should also focus on accelerating structural reforms, promoting investment, rebalancing fiscal and debt metrics, and strengthening financial stability to sustain growth, he noted.
Mongolia's growth prospects in 2021 and 2022 will largely depend on the course of the COVID-19 pandemic, the rebounding of commodity exports, the overall investment climate and private sector credit growth, according to the ADB's report.
Until the vaccination target of 60 percent of the population is achieved, concerns over public health will continue to dampen domestic demand and business confidence, which results in an uneven recovery outside of the mining sector, the report said.
In addition, average inflation is expected to accelerate to 6.9 percent in 2021 and 8.5 percent in 2022, rising above the 6.0 percent medium-term inflation target due to the economy and demand recover, fuel prices increase, among other reasons.
The bank warned that downside risks to the outlook would be prolonged impacts from COVID-19 on economic activity, slow implementation of the vaccination program, and deterioration in the investment climate. Enditem
