World Bank estimates that Mongolia’s economic outlook to shrink by 0.5 percent in 2020. As the pandemic spreads around the world and the quarantine lasted longer than originally expected, it was decided to reduce the forecast by six percentage points. However, economic growth is predicted to stand at 4.9 percent next year. Capital flows were disrupted and borrowing costs increased. High debt levels are a major challenge for Mongolia. The Asian Development Bank (ADB) also cut its outlook and released a new estimate in April, highlighting Mongolia’s economy to grow 2.1 percent this year. Moreover, the global economy is on track to shrink by 5.2 percent this year amid the COVID-19 pandemic, the deepest recession since the Second World War, the World Bank Group said in its latest Global Economic Prospects released Monday. Particularly, the economies of developing countries are expected to diminish for the first time in 60 years. Over 90 percent of the world’s GDP is expected to fall. The global economy is expected to lessen by 8 percent this year if the quarantine regime continues for a long time without limiting the spread of COVID-19. Estimates show that Mongolia’s economy will weaken by 4 percent if the quarantine regime is eased and economic communications are normalized. Despite the positive estimation of the economic outlook, the pandemic is causing damage twofold from the 2009 crisis.

Published Date:2020-06-11