ULAANBAATAR, Dec 20 (Reuters) - Mongolia’s economy is outpacing growth expectations this year despite budget cuts as the coal trade has been strong even as exports slowed in the second half, an International Monetary Fund official said.
Growth has proved “more durable than anticipated”, IMF Resident Representative Neil Saker told Reuters.
In 2016, Mongolia was hit by an economic crisis due to government overspending and declining revenue from commodity exports. Saker said the country is now headed toward recovery.
The IMF has raised its 2017 growth projection for Mongolia to 3.3 percent from 2.0 percent.
The Fund has dispersed $79.1 million from a $5.5 billion bailout fund to relieve the Northeast Asian country’s debt burden and stabilise the local currency.
The IMF has committed to a three-year extended fund facility worth $434.3 million, while Mongolia also has loans from Japan and South Korea as well as a currency swap agreement with China.
The growth forecast was upgraded even though Mongolia’s government made budget cuts to reduce the fiscal deficit to 7.5 percent of gross domestic product instead of 17 percent.
The stronger growth stems from higher coal prices paid by Mongolia’s number-one trade partner, China.
Mongolian miners have seen greater demand this year after the closure of some of China’s mines and Beijing’s ban on coal imports from North Korea.
However, Mongolia’s coal exports have slowed since July, as customs authorities have allo