The Asian country's economic growth is projected to expand 2.3 percent in 2022 before climbing to 5.6 percent in 2023, supported by domestic demand, investment, and recovery in industry, agriculture and services, the ADB said in its flagship annual economic report, Asian Development Outlook 2022.
"Previously, the ADB forecast that Mongolia's economy would grow by 5.7 percent in 2022. However, the continued border restrictions caused by the COVID-19 pandemic and an ongoing geopolitical conflict that began on Feb. 24 has been affecting not only the Mongolian economy but also the regional and global economic growth," said Sandagdorj Bold, a senior economics officer of the ADB.
Persistent high inflation and continued trade disruptions limit monetary and fiscal room, requiring a comprehensive macroeconomic policy adjustment plan to safeguard the economy, the ADB said.
Average inflation in Mongolia will accelerate further to 12.4 percent in 2022 as supply shocks and trade disruptions continue, and significantly higher fuel prices translate into higher business costs, according to the bank.
Under the impact of the COVID-19 pandemic and subsequent border closures, Mongolia's economy contracted by 4.6 percent in 2020 and expanded by an anemic 1.4 percent in 2021.
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