World Economics

Mongolian Economy Starts to Recover From Covid

The Mongolian economy has been badly affected by Covid over the past year.

The rapid and strongly enforced shutdown of the Chinese economy early in 2020 caused immediate problems and was followed by the near complete shutdown imposed by the Mongolian Government, as Covid infection spread.

However with the ending of the lockdown on February 23^rd, the first green shoots of recovery became quickly apparent in March. The Business Confidence Index rose to an 8 month high of 53.4, suggesting a rapid return of Keynes famous "animal spirits", and a widespread belief that the next few months will see the return of economic growth.

The new young Harvard educated Prime Minister has made general vaccination a clear priority, and although the Covid infection rate continues to cause concern, sales managers are clearly feeling that prospects for the country are improving.

In addition to the rapid rise in business confidence, both the Market Growth Index and Sales Index have broken through the important 50 "no growth" line, and both are also now at 8 month highs.

The main negative produced by the March survey stems from the key Staffing Index which remains well below the 50 level. The Index has recovered much of the ground lost during the harshest months of the winter, but the index reading suggests employers remain extremely cautious about recruitment. However the Index is expected to move into modest growth over the next few months as long as Covid remains under control.

Mongolia: Business Confidence Index

 

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