🎉 Happy 100th edition!

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Welcome to Inside Mongolia’s 100th edition! Our sincerest thanks to all our subscribers.

But guess what? This isn't just the 100th edition, it's also our final ride in 2023! So hold onto your hats, because we're packing this newsletter with the…

• Juiciest economic wraps, 

• Touristy triumphs, 

• Capital market highlights.

So before we raise a toast to the year ahead, let's savor this final chapter of Inside Mongolia 2023. Grab your chopsticks, dear readers, and let's dig in! 🤪

🤓 ECON Wrap 2023 

Mongolia's economy did well last year, growing by 6.9%. The foreign trade surplus for the first 11 months reaches $5.4 billion. Good news continued as inflation dropped from 12.3% to 8.6%.

Now, let's check out some numbers for 2023 to see how the year went for the economy.

• $4.3 billion: The foreign exchange reserves increased a lot this year. In November, it went up by 46.5% from the previous year, reaching $4.3 billion.

• 0.8%: At the start of the year, $1 equaled ₮3,445, but now the ₮ is 0.8% stronger than USD. ₮ also got stronger against other currencies: by 8.7% against the yen, 22.4% against the ruble, 3.3% against the yuan, and 3.7% against the won.

• 13%: The interest rate stayed the same this year at 13%. Last year, the Bank of Mongolia hiked it 5 times in a row to 13%. The reason is that the average inflation this year was 10.6%, higher than what the Bank of Mongolia expected, so they kept the strict monetary policy.

• $791.4 million: The first nine months of this year saw a surplus of $791.4 million in the balance of payments, the highest ever recorded. The current account, which was $1.8 billion in deficit last year, now has a surplus of $606.7 million. This happened because of more exports and a good trade balance.

This year was all about recovering the economy by selling more raw materials. The Ministry of Finance thinks the economy will grow by 7% next year, but there are some risks, like raw material prices dropping and less demand for mining products. 

✈️ Tourism Wrap 2023

Did you know? The government of Mongolia announced 2023-2025 as the year to visit Mongolia. Despite the government’s goal to receive 1 million tourists in 2023, which remains out of reach, the results were undeniably impressive. 

Record of Welcome to Mongolia

As of December 20th, 2023, Mongolia welcomed a record-breaking 640,000 tourists, surpassing historical figures. This milestone year Mongolia witnessed strong inflows from key markets, with Russia contributing the highest number of 217,000 tourists followed by South Korea with 139,800 tourists. Boosted by record-breaking tourist arrivals, the tourism sector's revenue already surpassed $1 billion for the first time. FYI, according to the Mongolbank’s data, tourists in Mongolia inject an average of $2,000-$2,048 per trip into the economy. 

• But: 2023 was a historic year for Mongolian tourism but the Government fell short of its ambitious target of drawing 1 million tourists. 

Diving deeper into details

Tourists from only 5 countries such as Russia, South Korea, and China accounted for 84% of total arrivals. Furthermore,

• Expanded Reach: As part of the "Welcome to Mongolia", visa requirements were temporarily lifted for citizens of 34 countries until the end of 2025. This policy, coupled with existing exemptions, means citizens of 61 countries can now enjoy visa-free travel to Mongolia.

Also, this year, Mongolia hosted a series of prominent figures representing diverse sectors, from cultural icons like Pope Francis and YouTube star Nas Daily to business leaders like CNN's Richard Quest and mining legend Robert Friedland. These visits generated significant media attention, highlighting Mongolia's cultural richness and growing economic potential on the global stage. 

🔥 Capital Market Wrap 2023

Mongolian 7 companies raised a total of ₮338.1 billion through their IPOs this year. Among those companies are 3 banks, 2 fintechs, 1 logistics company, and 1 food company. Following these IPOs, the Mongolian stock market rose by ₮4.4 trillion and reached ₮10 trillion. A total turnover on the Mongolian Stock Exchange (MSE) reached ₮669 billion, as of November. Let’s dig into the depth,

• Stock trading makes up 72.6% with 50.2% of the primary stock market and the secondary stock market accounting for 22.4%.

• Bond’s primary market trading share of 13.5% while the primary market for asset-backed securities (ABS) constituted 5.2% of the overall market activity.

Aside from the IPOs, Mongolian first exchange-traded fund, Invescore Global Q (INQ) was listed on the Ulaanbaatar Securities Exchange (UBX) at ₮500 per unit. The OTC market’s trading volume reached ₮401.1 billion, as of November, with an outstanding amount of ₮1.3 trillion as of 23rd of December. The average interest rate for OTC market bonds, maturing up to 18 months, stands at 19.7%.

At last, state-owned enterprises will go public in 2024 with a new tax law for foreign investors. The new law which is 1% capital gains tax on foreign investors will be implemented next year.

🏃 QUICK STORIES

🔵 The Upcoming Parliamentary election is to take place in 13 constituencies. Subsequently, the election is to be held with 7 constituencies in 21 provinces and 6 constituencies in the capital city Ulaanbaatar. In terms of electoral mandates, the I and II constituencies have the most or 10 mandates each.

🔵By signing air agreements with 42 countries, direct flights to a total of 115 destinations are possible, in 2023. Recently, the first direct flight between Ulaanbaatar and Dubai has been launched. As a result, passenger traffic increased by 3.5 times. 

🔵The Ministry of Finance and FRC introduced amendments to securities market law. These changes aim to establish an investor-friendly environment by enhancing the law's clarity, specifically defining terms, and regulating custodian banks' activities, benefiting professional and long-term investors.

🔵The Mongolian Central Securities Depository (MCSD) allocated ₮36.3 billion in dividends to 26 companies in 2023. These dividends were credited to the accounts of 159,292 investors, constituting 28.6% of total investors.

🔵The Ministry of Environment and Tourism of Mongolia to cooperate with Nas daily in 2024. The Nas Summit 2023 was held on August 19, and as a result over 160 million people got a chance to know Mongolia. Furthermore, the Minister of Culture unveils "GoMongolia" as the official international branding campaign for 2024.

⭐ TOP NEWS

• Bank: Mongolia Opens Door to Foreign Banks for First Time to Grow Financial Sector. (Bloomberg)

• Trade: Senior Official Says Mongolia Seeks to Expand Foreign Trade by Reviving Ports. (Xinhua)

• Foreign: Joint Statement on The United States-Mongolia Annual Bilateral Consultations. (USEmbassyinMongolia)

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Editor: E.Zolbayar
Writer: M.Khulan & Skh.Angirmaa & G.Aminaa

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be or constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.