Zud Unlikely To Derail Growth Story

Unseasonally cold weather this winter is likely to have a significant short term impact on the Mongolian economy. We expect inflation to head higher, pressure on government expenditures to rise and an exacerbation of systemic risks to the banking sector. That said, we believe that the deteriorating situation could give renewed impetus to the government's process of opening up the mining sector to foreign investment, and believe that Mongolia's robust growth story over the long term remains on track.

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