ULAANBAATAR, May 16 (Reuters) – Mongolia’s economy grew 8.6% in the first quarter of this year, accelerating from 6.2% growth in the same quarter in 2018 as coal exports and household spending surged, the government’s statistics office said.
Among other data released by the National Statistics Office on Wednesday, exports showed an 18.2% increase in the first four months of 2019 over the same period of the previous year.
The rise was driven by exports of coal – the country’s top export – which surged by 21% to reach $963.5 million. Coal exports generate about 35% of Mongolia’s total export revenues.
Wholesale and retail trade grew 13.9% in the first quarter.
“The (economic) growth was mainly supported by the increased foreign trade revenues, particularly from coal exports,” said Otgochuluu Chuluuntseren, an adviser with the Economic Policy and Competitiveness Research Center, an Ulaanbaatar based think-tank.
Increased household spending during the Lunar New Year holiday, known as Tsagaan Sar in Mongolia, also typically leads to higher economic growth in first quarter, he added.
After double-digit expansion from 2011-2013, driven by a mining boom, Mongolia’s growth plummeted to just 1.2% in 2016 following a collapse in foreign investment and commodity prices.
It was forced to turn to the International Monetary Fund for assistance in 2017 amid heavy government debt and a collapse in the value of its currency, the tugrik.
The economy has been making a comeback, though, and growth reached 6.9% last year.
Still, the economy remains vulnerable, said Otgochuluu.
“The economy is still so fragile, as the growth is based on commodity price surge, which is always fluctuating,” he said.
“In order to sustain the growth, the economy should be diversified. Supporting travel and tourism by air service liberalization could be one option.” (Reporting by Munkhchimeg Davaasharav; Editing by John Ruwitch & Simon Cameron-Moore)