Can Mongolia’s Austerity Push Break the Cycle?

The government moves fast to rein in a ballooning deficit. Will it stick?

Mongolia’s new government is off to a bracing start. Just days after taking office, Prime Minister Gombojavyn Zandanshatar’s cabinet unveiled a sweeping fiscal consolidation plan.

The full projected shortfall of ₮2.3 trillion (~$660 million) by year’s end is to be eliminated. Of that, more than ₮500 billion comes from capital expenditure, while ₮1.8 trillion is allocated to current spending. Ministers have already been reduced from 22 to 19, and 30 national councils and committees are to be abolished.