Mongolia's Economy Set to Grow 4.8% in 2024 Despite Global Risks

The World Bank projects Mongolia's economy to grow 4.8% in 2024, driven by the mining sector, private consumption, and fiscal expansion. Despite risks from a global growth slowdown, geopolitical tensions, and climate change, Mongolia's economy is expected to experience moderate growth in the coming year.

Why this matters: Mongolia's economic growth has significant implications for regional trade and investment flows, particularly with its neighbors China and Russia. A strong economy in Mongolia can also contribute to regional stability and cooperation, which is crucial in the face of global challenges.

The mining sector is expected to be a key driver of Mongolia's economic growth, along with private consumption and fiscal expansion. The World Bank report highlights the importance of Mongolia's interconnectivity with its neighbors, China and Russia, to enhance resource trade and investment flows. Mongolian Prime Minister Luvsannamsrai Oyun-Erdene emphasizes the significance of this interconnectivity, stating that his country is "ready and waiting for its two neighbors to act."

While the report does not provide specific details on the volume of gas sent to China, it mentions that Gazprom is working to ramp up supplies to Beijing via the Power of Siberia pipeline. This underscores the growing energy ties between Russia and China, which could have implications forMongolia's economyas well.

Mongolia's economic growth projections come amid efforts to foster stronger economic cooperation with other countries in the region. Deputy Head of Mission of Mongolia, Lkhanaajav Munkhtushig, recently emphasized the need toboosting, economic, tiesbetween Pakistan and Mongolia during a meeting at the Korangi Association of Trade Industry (KATI) in Karachi.

According to World Bank estimates, Mongolia's economic growth rate is estimated to surge from 5.6% to 6.2% in the coming years. The country's total trade is worth $24 billion, comprising $15 billion in exports and $9 billion in imports. However, the volume of bilateral trade between Pakistan and Mongolia remains very low, and urgent steps are needed to revitalize trade relations.

Munkhtushig urged Pakistan to leverage the China-Pakistan Economic Corridor (CPEC) to bolster economic linkages with Mongolia. He also invited Pakistani investors to explore opportunities for investment and bilateral trade in Mongolia, offering full government support and facilities, particularly in the cotton industry. President KATI Johar Qandhari emphasized the need for reciprocal trade visits and trade promotion through local currencies, and proposed organizing single-country exhibitions to facilitate bilateral trade.

As Mongolia looks to capitalize on its moderate economic growth projections for 2024, strengthening regional interconnectivity and fostering bilateral trade relations will be crucial. The country's mining sector, private consumption, and fiscal expansion are expected to drive growth, but navigating the risks posed by global economic slowdown, geopolitical tensions, and climate change will require strategic planning and cooperation with key partners like China, Russia, and Pakistan.