Fitch Ratings: Mongolia exposed to COVID-19 economic fallout
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- Mongolia faces no external bond maturities up to early 2021
- Mongolia’s external position, macroeconomic stability could be adversely affected if disruption to exports were to extend for several months
Fitch ratings reported that exposure to economic disruption from the COVID-19 virus outbreak is highest in Hong Kong and Mongolia. Additionally, Mongolia’s commodity-driven economy is immensely dependent on China. If the restriction to exports extends for several months, Mongolia’s external position and macroeconomic stability can still be adversely affected.Mongolia has improved economic performance in recent years has permitted the country to build a stronger financial cushion. Fitch believes these are sufficient for a short-term shock. Moreover, the Government of Mongolia (GoM) faces no external bond maturities until early 2021. The chance of a sharp loosening of fiscal policy ahead of parliamentary elections, most likely in June, could also increase if the authorities become more concerned about the economic impact of the virus said, Fitch.