- Rising prices of basic goods is pushing more people into poverty in Mongolia.
- ADB and the Asian Infrastructure Investment Bank are helping Mongolia deal with slow growth and high inflation through the Weathering Exogenous Shocks Program.
- ADB’s Weathering Exogenous Shocks Program is helping stabilize Mongolia’s economy and directly assisting the poorest and most vulnerable in the country.
ADB and the Asian Infrastructure Investment Bank are helping Mongolia help its poor and vulnerable people deal with the impacts of rising food and fuel prices through the Weathering Exogenous Shocks Program. This initiative is a countercyclical development expenditure program that aims to cushion the effects of inflation and support macroeconomic stabilization.
The program is helping women, children, and other poor and vulnerable groups in the country become better prepared for any crisis through measures that help increase their resilience. Some of these measures include enhancing the country’s protection program, providing concessional loans to micro business owners, and increasing the salaries of lowest-earning public employees.
Transcript
Mongolia: Building Resilience to Weather Economic Shocks
Still reeling from the economic effects of COVID-19,
Mongolia was dealt with another shock— the Russian Federation’s invasion of Ukraine.
Mongolia's economy before the COVID-19 pandemic had been generally sound.
Despite lifting pandemic-related restrictions and a successful vaccination campaign, the Russian Federation’s invasion and PRC’s COVID-19-related border restrictions continued to create disruptions in Mongolia’s trade.
The Russian Federation and the PRC are Mongolia’s major trading partners.
Inflation spiked to 16.1% in 2022 and was particularly high for food and fuel.
The rising prices were hitting Mongolia’s population, especially the vulnerable ones.
To help the government set policies in place to cushion its people from the effects of these shocks, ADB, with cofinancing from the Asian Infrastructure Investment Bank, approved the Mongolia: Weathering Exogenous Shocks Program.
The program supports government measures to create resilience in the population, specifically the poor and vulnerable groups, to adverse economic shocks.
As an immediate output, the program supported the government’s initiative to temporarily increase direct cash transfers to households, aiming to reach 480,000 vulnerable households.
After the program,
• cash transfers have been given to vulnerable households (i.e. MNT100,000 via the government-led Child Money Program)
• vulnerable groups are protected from the bad effects of external shocks
• and pressures from rising prices have been addressed.
ADB, AIIB, and Mongolia—
Working together to enable the poor and vulnerable withstand and recover from economic shocks.
