Executive Board of IMF to discuss third financing of EFF program

The third financing of the Extended Fund Facility (EFF) program implemented by the Government of Mongolia and International Monetary Fund (IMF) is expected to be settled at the meeting of Executive Board of IMF today. Accordingly, the board will conduct the performance review of EFF program, which has been implemented for over a year, to decide on the third financing. After the previous review SDR 55.9 million fund or USD 79.1 million was enabled by the IMF. The successful implementation of the program will allow for an amount equivalent to SDR 314.5 million, or about USD 434.3 million.

The IMF staff team conducted discussions on the third review of the three-year Extended Fund Facility in February and concluded that Mongolia’s economy is doing better than expected led by commodity exports and a pick-up in domestic demand. They also warned the growth outlook is subject to risks including a fall in external demand for commodities and higher fuel prices. Thus, the team noted it is essential that the authorities continue to build buffers and implement the structural reforms necessary for high and sustainable growth. In addition, the IMF expects Mongolia’s economy to grow by 5 percent this year and 6.3 percent in 2019. The overall fiscal deficit in 2017 was 1.9 percent of GDP compared to the target of 10.6 percent and 17 percent in 2016. IMF highlighted that fiscal results have been better than expected, supported by stronger revenues and tight expenditure control. The fiscal over-performance has provided some room for adapting program policies including a rise in civil service salaries in 2019 after several years of restraint, informed the IMF staff team in their statement after the visit.