The World Bank projects that the Mongolian budget deficit will reach over 18 percent of national GDP by the end of this year. If current trends continue government debt financial obligations will reach 90 percent of GDP.
The report welcomed the swift measures announced by the new government to address the growing fiscal risks, and called for strong fiscal and monetary policy adjustment to address increasing fiscal and balance of payments risks.
The World Bank noted that the central bank has provided significant liquidity to the government, and warns that continued financing of the government could worsen macroeconomic vulnerability.
The World Bank also cautioned that falling mineral exports would add challenges the balance of payments in 2017, but indicated that with proper fiscal and macroeconomic management such problems could be overcome.