On 28 March 2018, the Executive Board of the International Monetary Fund (IMF) completed the third review of Mongolia’s performance in the programme supported by a three-year extended arrangement under the Extended Fund Facility (EFF).

Completion of the review enables Mongolia to draw the equivalent of SDR 20.9598 million (about USD 30.55 million), bringing total disbursements under the arrangement to SDR 104.8278 million (about USD 152.79 million), the IMF said.

The SDR, or Special Drawing Rights, are international reserve assets, created by the IMF in 1969.

Mongolia’s performance under the programme thus far has been strong. The economy is recovering better than expected, with real GDP growth of 5.1 percent in 2017 and a significant improvement in the fiscal balance of 15 percentage points of GDP. The combination of strong policy implementation and a supportive external environment has helped the authorities over-perform on all end-December 2017 quantitative targets. However, the performance on structural reforms has been mixed with some delays on structural benchmarks under the programme and reversals of three fiscal measures considered during previous reviews.

Mongolia’s three-year extended arrangement was approved on 24 May 2017, in an amount equivalent to SDR 314.5054 million, or about USD 434.3 million at the time of approval of the arrangement (see IMF Press Release No. 17/193 ). The government’s Economic Recovery Program, supported by the IMF, aims to stabilize the economy, reduce the fiscal deficit and debt, rebuild foreign exchange reserves, introduce measures to mitigate the boom-bust cycle and promote sustainable and inclusive growth.

Following the Executive Board’s discussion of the review, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, said:

“Mongolia’s performance under the Fund-supported program has been favorable. The economy is recovering better than anticipated due to good programme implementation, buoyant external demand, and a return of confidence. The fiscal deficit fell sharply due to a substantial pick up in revenues and strict expenditure control, yielding a notable improvement in the public debt outlook. External financing costs continue to fall, with external bonds maturing in 2018 rolled over at lower interest rates, and foreign exchange reserves have recovered further.

“All end-December 2017 quantitative targets under the programme have been met. Fiscal and banking sector reforms are proceeding, albeit with some deviations and delays. Fiscal results have been significantly better than expected, with a major reduction in the deficit, supported by expenditure restraint and a strong recovery in mining-related revenues. Official reserves have more than doubled over 2017, reflecting a jump in coal exports, capital inflows, and disbursements under the external financing package from donors and the IMF’.