ULAN BATOR, May 29 (Xinhua) -- The credit rating agency Fitch Ratings has graded Mongolia's long-term foreign-currency issuer default rating at "B" with a stable outlook, Mongolia's central bank said Friday, citing a report from the agency.
In its report, Fitch said Mongolia's commodity-dependent economy this year is facing a sharp slowdown in its gross domestic product (GDP) and export growth, deterioration in public finances, and erosion in external buffers due to the COVID-19 shock.
Nevertheless, the rating reflects Fitch's belief that the impact will be largely temporary, with the economy rebounding strongly and government debt and GDP starting to decline again in 2021, the report said.
The agency said significant downside risks are captured at the B rating level, and Mongolia's strong structural factors combined with expected access to financing from multilateral and bilateral creditors provide support to the sovereign ratings.
Fitch has forecasted the economy will contract by 2 percent in 2020, before rebounding to 7.9 percent in 2021.