Mongolia’s economy grew by 5.3% y/y in the first half of 2017, state-run Montsame news agency reported on August 18.
Growth was mainly driven by increased demand for Mongolia’s coal in China, the country’s main trading partner, as well as thanks to the $5.5bn bailout agreement reached with the International Monetary Fund in February. Under the agreement, Mongolia has already started receiving assistance from IMF’s $430mn credit facility.
With deadlines looming for repayments worth $1bn in debt by January 2018, Mongolia's leaders went into talks with representatives of the IMF, China, India and Japan for crisis relief talks to arrange the bailout. Mongolia now finds itself receiving support from a number of sources including the IMF, the World Bank, the Asian Development Bank and the International Investment Bank.
A boom in FDI helped Mongolia rack up astronomical GDP growth of 17.5% back in 2011. Since then, the economy has been on a downwards trajectory - it grew by only 1% in 2016, down from the 2.3% seen in 2015.
Investment flowing into the country has declined with difficulties encountered in completing talks over the underground development of the flagship Oyu Tolgoi copper mine and a subsequent freefall in commodity prices badly hitting an economy reliant on mining coal, copper and gold. Coal prices have recovered, however, contributing to the Mongolia’s half-yearly growth.
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