Mongolia flag

The Economy of Mongolia

Mongolian Economy

Mongolia's map

Economy - overview: Economic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has extensive mineral deposits. Copper, coal, gold, molybdenum, fluorspar, uranium, tin, and tungsten account for a large part of industrial production and foreign direct investment. Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990 and 1991 at the time of the dismantlement of the USSR. The following decade saw Mongolia endure both deep recession because of political inaction and natural disasters, as well as economic growth because of reform-embracing, free-market economics and extensive privatization of the formerly state-run economy. Severe winters and summer droughts in 2000-02 resulted in massive livestock die-off and zero or negative GDP growth. This was compounded by falling prices for Mongolia's primary sector exports and widespread opposition to privatization. Growth averaged nearly 9% per year in 2004-08, largely because of high copper prices and new gold production. Until late 2008 Mongolia experienced a soaring inflation rate, with year-to-year inflation reaching nearly 40% - the highest inflation rate in over a decade. In late 2008 falling commodity prices in this import-reliant country helped lower inflation, but by that time, the country had begun to feel the effects of the global financial crisis. Falling prices for copper and other mineral exports reduced government revenues and is forcing cuts in spending. The global credit crisis has stalled growth in key sectors, especially those that had been fueled by foreign investment. Mongolia's economy continues to be heavily influenced by its neighbors. Mongolia purchases 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. Trade with China represents more than half of Mongolia's total external trade - China receives about 70% of Mongolia's exports. Remittances from Mongolians working abroad both legally and illegally are sizable, but have fallen due to the economic crisis; money laundering is a growing concern. Mongolia settled its $11 billion debt with Russia at the end of 2003 on favorable terms. Mongolia, which joined the World Trade Organization in 1997, seeks to expand its participation and integration into Asian regional economic and trade regimes.

GDP:

GDP - real growth rate: 8.9% (2008 est.) 9.9% (2007 est.) 8.6% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 18.8% industry: 38.5% services: 42.7% (2008)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 3% highest 10%: 24.6% (2002)

Distribution of family income - Gini index: 32.8 (2002)

Inflation rate (consumer prices):

Labor force: 1.068 million (2008)

Labor force - by occupation: agriculture: 34% industry: 5% services: 61% (2008)

Unemployment rate: 2.8% (2008)

Budget: revenues: $1.71 billion expenditures: $1.95 billion (2008)

Industries: construction and construction materials; mining (coal, copper, molybdenum, fluorspar, tin, tungsten, and gold); oil; food and beverages; processing of animal products, cashmere and natural fiber manufacturing

Industrial production growth rate: 3% (2006 est.)

Electricity - production: 3.979 billion kWh (2008)

Electricity - production by source:

Electricity - consumption: 3.491 billion kWh (2008)

Electricity - exports: 15.8 million kWh (2008)

Electricity - imports: 197.5 million kWh (2008)

Oil - production: 3,216 bbl/day (2008)

Oil - consumption: 12,780 bbl/day (2008)

Oil - exports: 2,902 bbl/day (2008)

Oil - imports: 17,680 bbl/day (2008)

Oil - proved reserves: NA bbl

Natural gas - production: 0 cu m (2007 est.)

Natural gas - consumption: 0 cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 0 cu m (2007 est.)

Natural gas - proved reserves: 0 cu m (1 January 2006 est.)

Agriculture - products: wheat, barley, vegetables, forage crops; sheep, goats, cattle, camels, horses

Exports: $2.539 billion f.o.b. (2008)

Exports - commodities: copper, apparel, livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals, coal

Exports - partners: China 71.9%, Canada 10.7%, US 4.8% (2007)

Imports: $3.615 billion c.i.f. (2008)

Imports - commodities: machinery and equipment, fuel, cars, food products, industrial consumer goods, chemicals, building materials, sugar, tea

Imports - partners: China 32%, Russia 29.4%, South Korea 7.9%, Japan 7.2% (2007)

Debt - external: $1.6 billion (2008)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: togrog/tugriks (MNT) per US dollar - 1,267.51 (2008), 1,170 (2007), 1,165 (2006), 1,205 (2005), 1,185.3 (2004)

Fiscal year: