Mongolia’s economy grew by 5.1% y/y in 2017, up from the 1% growth recorded in 2016, according to latest figures issued by the National Statistics Office of Mongolia.

The recovery was mainly driven by increased demand for Mongolia’s coal in China, the country’s main trading partner - which can no longer buy North Korean coal due to sanctions - as well as by the $5.5bn bailout agreement reached with the International Monetary Fund (IMF) in February last year.

Last year also saw Mongolia’s industrial production rise by 18.1% y/y to MNT12.9tn (€4.37bn). Growth was mainly down to rising production in the mining and quarrying sector, mostly thanks to increased coal mining. The mining sector also grew due to rising production of gold, molybdenum concentrate, crushed stone and iron ore, the statistics office said.

Under the IMF-led bailout, Mongolia has already started receiving assistance from a $430mn credit facility.

With deadlines looming for debt repayments worth $1bn by January this year, 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 – the 2016 growth of 1% was down from the 2.3% seen in 2015.

Investment flowing into the country has declined in recent years 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 the mining of coal, copper and gold. Coal prices have recovered, however, contributing to Mongolia’s growth.