ULAN BATOR, Sept. 21 (Xinhua) -- Mongolia's economic growth is expected to remain low this year, said an updated Asian Development Bank (ADB) report released on Wednesday.

According to the Asian Development Outlook 2022 Update, the Mongolian economy is expected to grow 1.7 percent this year, down from an April projection of 2.3 percent, while the forecast for next year has been lowered to 4.9 percent from 5.6 percent.

The lowering growth projections are due to prolonged border restrictions caused by the COVID-19 pandemic, deterioration of purchasing power under persistently high inflation, higher borrowing costs, a likely decline in the availability of credit, and a continuation of monetary tightening, the ADB said.

"Despite initial signs of recovery, the economy's near-term growth prospects remain uneven," said Pavit Ramachandran, ADB country director for Mongolia.

"A combination of persistently high inflation and a large current account deficit creates a pressing need for achieving better macroeconomic balance while focusing on medium-term structural reforms," said the director.

The annual inflation rate in Mongolia reached 14.4 percent in August, while in the capital Ulan Bator, home to over half of the country's population of 3.4 million, the figure reached 14.8 percent, the country's central bank has said.

The surge in inflation is expected to continue in 2022, mainly due to "persistent supply disruptions, rising transportation costs, exchange rate depreciation and its pass-through impacts, and higher prices for food, fuel, and imported durables," said the ADB. Enditem

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