The National Statistics Office (ONS) of Mongolia and the World Bank today announced their joint official estimate of the poverty rate for 2020. Since 2002, the two organizations have collaborated on measuring poverty based on surveys on household consumption.

According to the 2020 Household Socio-Economic Survey (HSES), the official national poverty rate in 2020 was 27.8%^[1]which is 0.6 percentage points less than in 2018. This translates to approximately 903.4 thousand Mongolians living in poverty in 2020.

Compared to 2018, the urban poverty rate fell by 0.7 percentage point to 26.5%, while the rural poverty rate fell by 0.3 percentage point to 30.5%. Among the poor, 64% lived in urban areas in 2020, including 43% in Ulaanbaatar.

While estimates show that poverty in 2020 was slightly lower than in 2018, the COVID-19 pandemic has sharply slowed the pace of poverty reduction. The simulations indicate that in the absence of the pandemic, poverty in 2020 could have been about 3 percentage points lower, suggesting that poverty reduction has stalled due to the pandemic. The wide range of COVID-19 relief programs, including supplements to existing social assistance programs, undoubtedly played a crucial role in preventing an increase in poverty between 2018 and 2020.

Table 1 Poverty rate and number of poor, 2018-2020

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^[1] Household well-being and the official poverty rate for 2020 were estimated by a survey-to-survey imputation approach (see appendix)

Annex. The poverty estimation methodology for the 2020 Household Socio-Economic Survey

The Household Socio-Economic Survey (HSES) is the official survey for monitoring household welfare and poverty as well as key socio-economic indicators in Mongolia. The HSES has been implemented every two years since 2012. Official poverty rates have been reported at the national, urban/rural and aimag level, estimated as the share of the population consuming below the national poverty line.

In line with international best practice, changes have been introduced in the HSES 2020 consumption module to better reflect current consumption patterns. While these changes improve the accuracy of consumption measured by the 2020 survey, household consumption over time is no longer comparable. In order to restore the comparability of household consumption and 2020 poverty rates with previous survey years, the 2020 poverty rate was simulated on the SWIFT More (“Well-being survey via instant and frequent follow-up”)^[2] survey-to-survey imputation approach. In the SWIFT Plus imputation approach, HSES 2018 is used to model consumption, and this model is applied to HSES 2020 data to predict consumption and poverty in 2020. Additionally, in order to improve the accuracy of the estimates at the aimag level, the model was developed individually by each group of aimags (8 urban groups and 6 rural groups) and poverty was estimated at the national, urban and rural and aimag levels. The 2020 poverty estimate was produced with close collaboration and technical assistance from the World Bank’s Global Practice Team on Poverty and Equity and SWIFT.

Going forward, the future HSES will adopt the same consumption module as the 2020 survey and a new round on poverty will start with the rebasing of the national poverty line on the 2022 survey. together with the revision of a consumption module, it was decided to postpone the exercise to 2022 due to the disruptions induced by COVID-19 in field work and consumption habits.

^[2] For more details, please see Yoshida, N., Munoz, R., Skinner, A., Lee, C., Brataj, M., Durbin, SW and Sharma, D. (2015). “Wellness Survey via Instant and Frequent Tracking (SWIFT) Data Collection Guidelines.” Washington, DC: World Bank Group. and an upcoming technical note for Mongolia’s 2020 poverty estimate.