IMF completes Fourth Review of Mongolia’s Extended Fund Facility


2018-05-23 09:32 GMT+8

An International Monetary Fund (IMF) staff team led by Mr. Geoff Gottlieb visited Ulaanbaatar from May 2-17 to conduct discussions on the fourth review of the three-year Extended Fund Facility (EFF).

At the conclusion of the visit, Mr. Gottlieb remarked “Macro-economic performance under the program remains positive, with all quantitative targets met. Fiscal results in the first quarter of 2018 have been much better than expected with a 21-percent improvement in revenues. Net international reserves improved by USD 200 million over the same period.

On fiscal policy, Mr. Gottlieb highlighted that the authorities’ program for 2018 envisages continued budgetary restraint and strengthening tax administration. In addition, the authorities are taking concrete steps to improve public financial management particularly with respect to concessions, public investment projects, and the operations of the Development Bank of Mongolia.

“In the financial sector, the authorities are moving ahead with the strengthening of the banking system as part of the follow-up to the recently completed Asset Quality Review. Banks that are undercapitalized will have until end-December to raise capital. A law that sets out, under appropriate conditions, when public funds can be used to stabilize banks is expected to be passed shortly. The authorities are also moving ahead with reforms that will allow for more rapid NPL resolution and strengthening banks’ balance sheets,” emphasized Mr. Gottlieb.

The IMF underlined that it is critical to maintain progress in building reserves to help insulate the economy from external shocks. “Sound macro-economic policies accompanied with structural reforms of the banking system will help durably reduce interest rates,” recommended the IMF in its report.


  • Driven by strong external demand, Mongolia’s economy continues to recover; key macro- economic goals, including to reduce the fiscal deficit and boost international reserves, have been achieved.
  • This progress notwithstanding, risks to the program remain, including lower external demand for commodities, a slowdown in structural reforms, rising domestic spending pressures, and adverse changes to the investment climate.
  • To safeguard the program’s continued success, the focus should remain on strengthening the banking system, ensuring a prudent fiscal policy, remaining vigilant against inflation, building foreign exchange buffers, and improving public financial management.
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