Evaluation of the Program for Supporting Food and Agriculture Production using Policy Costing Simulation

<jats:p>Although the Government of Mongolia implements numerous policies and initiatives, comprehensive methodologies and full assessments of their medium- to long-term implications for the state budget and the economy are not always publicly available. Building on a semi-structural GAP model, this study applies a policy costing methodology to estimate the budgetary and economic effects of the government-implemented subsidized loan program in 2023 to support the production of food and agricultural products. The Mongolia Macro-Fiscal Model by NRGI (2017), extended and updated with data through the third quarter of 2023, was used to simulate the program as an exogenous shock and to compare the resulting paths with a baseline projection. The exercise is an ex-ante policy-costing simulation rather than an empirically identified impact evaluation; the reported magnitudes are therefore model-implied effects that hold under the stated assumptions. The results indicate that, compared to the baseline projections, the program is expected to have a tangible positive effect on the economy in the medium term. Relative to the baseline projections, the simulations suggest that the program is associated with a positive contribution to economic activity over the medium term. By applying a policy-costing approach to a government program in Mongolia, this study represents an initial attempt that may serve as a useful starting point for similar analyses.</jats:p>