AKIPRESS.COM - Fitch Ratings credit rating  agency  confirmed Mongolia's long-term foreign currency issuer default rating at 'B' with a stable outlook.

Development of the mining sector has significantly expanded Mongolia's economy over the past decade, raising GDP per capita and supporting a decline in public and external debt burdens, Fitch Ratings note. 

However, it has also contributed to high volatility in key credit metrics, and the durability of these improvements will be tested again as Mongolia enters a parliamentary election year with record-high mining exports and expansionary fiscal policy. The durability of these improvements will be tested again as Mongolia enters a parliamentary election year with record-high mining exports and expansionary fiscal policy.

Preliminary estimates point to GDP growth of nearly 7% in 2023, from 5% in 2022, driven mainly by a surge in mining activity. Growth is likely to slow to 4% in 2024 as exports stabilise, despite a pick-up in domestic demand.

Higher coal exports reflected more efficient customs clearance on the Mongolia-China border, as well as improving transport links.

The strategic Oyu Tolgoi copper mine's underground phase started production in March 2023, although volumes will only rise significantly from 2025. Other mining and infrastructure projects could support medium-term growth.