ULAN BATOR, Sept. 25 (Xinhua) -- Strong external demand, rising consumption, and increased government spending are set to drive economic expansion in Mongolia this year, leading to a higher growth forecast for the country's gross domestic product (GDP) in 2024, according to the Asian Development Bank (ADB) on Wednesday.
In its Asian Development Outlook (ADO) for September 2024, the ADB forecasts Mongolia's economic growth at 5.5 percent for 2024, an increase from the 4.1 percent projected in April. Growth is expected to further accelerate to 6.0 percent in 2025, consistent with previous projections.
Continued growth is expected to be driven by expansions in the services and industrial sectors, including mining. A recovery in agriculture from the sharp decline experienced in the first quarter of 2024, along with increased government spending, is anticipated to further boost economic activity next year.
"The continued strong expansion in the first half of 2024 is good news for the Mongolian economy," said Shannon Cowlin, the ADB's country director for Mongolia. "It is important to use this upswing to build buffers against possible future shocks and invest wisely in the future economy to support broad-based, diversified growth."
Mongolia's economic growth has remained robust this year, partly due to higher-than-expected mining output. This surge has boosted exports, with coal exports rising by 37.6 percent year-on-year in the first half of 2024, contributing to increased government revenues and stimulating growth in related service sectors, particularly in goods transportation. Additionally, rising domestic demand, supported by moderating inflation and higher public sector wages, has further sustained the country's economic expansion, according to the ADB.
However, risks to the outlook include potential delays in the expansion of output from the Oyu Tolgoi copper-gold mining project in the southern Mongolian province of Umnugovi, as well as disruptions in prices and supply chains stemming from geopolitical tensions and climate-related shocks, the bank warned. ■