Mongolia's economy is expected to grow by 5.7% this year, according to the Asian Development Bank. They re-run the forecast and increased the growth by 0.3 percentage points which is good news. However, next year's prediction has been lowered. Why? Here's the scoop.

What's behind 0.3?

There are a few reasons for the improved outlook this year,

• The country had a surplus of $474.9 million in its balance of payments for the first half of the year, the highest ever.
• In July, the current account in the balance of payments made a profit of $153.1 million.
• The mining industry is bouncing back, leading to a 29.2% year-on-year increase in total exports in August, and the foreign trade balance grew by 89.5% to $4.1 billion.

What's Up for Next Year

Unfortunately, next year looks a bit shaky due to some challenges. China's economic troubles and inflation in Mongolia have been on the rise for 27 months, exceeding the target set by the Bank of Mongolia.

• Now, let's get even clearer: Some big problems like China's money trouble and issues with trading with other countries might slow down Mongolia's growth. This is because there might be less demand for things Mongolia sells, like raw materials, and trading with other countries could be tricky because of tensions between them. There are some serious concerns like reduced demand for raw materials due to China's economic crisis and potential issues with foreign trade because of geopolitical tensions.

To Keep Things Smooth

To cushion the blow from China's economic troubles next year, it's important to tackle some ongoing issues,

• Diversify the economy beyond mining by broadening the tax base and attracting foreign investment. Support businesses to keep jobs stable.

In simple terms, this year's looking better for Mongolia, but next year could be tougher due to problems in China and rising inflation. To stay strong, Mongolia needs to diversify its economy and help local businesses.