Mongolia’s long-term debt ratings have been raised by Fitch Ratings after the nation’s economy returned to growth and its foreign-exchange reserves climbed to a record. Fitch revised the country’s long-term foreign- and local- currency rankings to B+ from B, reversing a January 2009 cut, and affirmed short-term ratings at B, it said in an e-mailed statement yesterday. The ratings have a stable outlook, it said.

Growth in Mongolia’s gross domestic product will be spurred by demand for its exports from China, according to the credit assessor. “A solid growth outlook in Mongolia’s key export market, China, supports its economic prospects in 2011 and 2012,” the ratings company said in the statement. “A generous and diversified endowment of natural resources supports long-term economic prospects.”

Fitch predicted Mongolia’s economy will expand 7.5 percent in 2011 and 8 percent in 2012. Annual output from the Oyu Tolgoi copper and gold mine may rise to USD3.5 billion by 2013, equal to more than 90 percent of Mongolia’s gross domestic product this year, based on current prices of the metals, according to Fitch.

Mongolia’s decision in September not to draw the final installment of a USD229-million loan from the International Monetary Fund underscores the nation’s economic recovery, Fitch said. Its foreign reserves increased to USD1.7 billion on September30, from USD500 million at the end of March 2009, according to the statement. The currency gained 16 percent by the end of October from its March 2009 low.  “The key risk remains a return to unsustainable government spending growth, which could squander this progress,” says the Fitch statement.