According to the Monetary Policy Department of the Bank of Mongolia (BoM), Mongolia’s economy will shrink in the first half of 2020 and in the second half, economic growth could reach 1.8 percent. The International Monetary Fund assumed that Mongolia’s economy will lessen by 1 percent this year. Asian Development Bank (ADB) has cut its previous assumption to 2.1 percent. The Monetary Policy Committee convened on April 13 and decided to lower the interest rate by 1 percent to 9 percentage point which is the lowest in the last 13 years. In other words, the policy rate was the same in 2007. This level was reached by holding two irregular meetings and lowering the interest rate by one unit each. Central bank officials explained that the decision has been made in an effort to prevent the risk of economic shrinkage. Director of Monetary Policy Department, Bayardavaa Bayarsaikhan said, “Lowering the policy interest rate is mainly driven by the risk of internal economy contraction.” As reported previously, BoM also decided to extend the term of the most vulnerable consumer loans by 12 months. According to the central bank, the decision is aimed at supporting economic demand by reducing the financial burden of households and mitigating the negative shock of consumption.The economic performance in the first two months of 2020 shows that the general government budget revenue reached MNT MNT 2.2 trillion, a decrease of MNT 173.7 billion or 10.6 percent year-on-year. As a result of export decline by as much as 29.5 percent, the mineral industry revenue which makes up 23.7 percent of the general budget revenue amounted to MNT 347.3 billion, contracted by 32.9 percent compared to Q1 2019.

Published Date:2020-04-22