To avoid an economic crisis, the Mongolian government will receive USD 5.5 billion through an Extended Fund Facility agreement with the International Monetary Fund. However, the government must also cut its expenditures and increase taxes, a process known as “fiscal consolidation”. As the country’s economy is highly reliant on the mining sector, a team of local PEP researchers evaluated how fiscal consolidation is likely to impact the Mongolian economy under different international commodity price conditions. Their findings indicate that fiscal consolidation when international commodity prices are low could result in significantly decreased production and GDP. Find out more about the research methods, findings and policy recommendations in the following PEP publications:
