Mongolia Economy Profile 2009

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 have reduced government revenues and are 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 (purchasing power parity)

$9.476 billion (2008 est.)
$8.694 billion (2007 est.)
$7.911 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$5.258 billion (2008 est.)

GDP - real growth rate

9% (2008 est.)
9.9% (2007 est.)
8.6% (2006 est.)

GDP - per capita (PPP)

$3,200 (2008 est.)
$2,900 (2007 est.)
$2,700 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 18.8%
industry: 38.5%
services: 42.7% (2008)

Population below poverty line

36.1% (2004)

Labor force

1.068 million (2008)

Labor force - by occupation

agriculture: 34%
industry: 5%
services: 61% (2008)

Unemployment rate

2.8% (2008)
3% (2007)

Household income or consumption by percentage share

lowest 10%: 2.9%
highest 10%: 24.9% (2005)

Distribution of family income - Gini index

32.8 (2002)
44 (1998)

Budget

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

Inflation rate (consumer prices)

28% (2008 est.)
9% (2007 est.)

Central bank discount rate

14.78% (31 December 2008)
9.87% (31 December 2007)

Commercial bank prime lending rate

NA% (31 December 2008)
17.54% (31 December 2007)

Stock of money

$521.2 million (31 December 2008)
$504.7 million (31 December 2007)

Stock of quasi money

$1.288 billion (31 December 2008)
$1.53 billion (31 December 2007)

Stock of domestic credit

$1.743 billion (31 December 2008)
$1.183 billion (31 December 2007)

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

fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (2001)

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 - imports

17,680 bbl/day (2008)

Oil - exports

2,902 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.)

Current Account Balance

-$1 billion (2008 est.)
-$23 million (2007 est.)

Agriculture - products

wheat, barley, vegetables, forage crops; sheep, goats, cattle, camels, horses

Exports

$2.539 billion (2008)
$1.889 billion (2007)

Exports - commodities

copper, apparel, livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals, coal

Exports - partners

China 75.7%, Canada 9%, Russia 3.2% (2008)

Imports

$3.615 billion (2008)
$2.117 billion (2007)

Imports - commodities

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

Imports - partners

Russia 35.1%, China 28.9%, Japan 7.6%, South Korea 6.4% (2008)

Debt - external

$1.6 billion (2008)
$1.438 billion (2007)

Stock of direct foreign investment - at home

$NA

Stock of direct foreign investment - abroad

$NA

Market value of publicly traded shares

$412 million (31 December 2008)
$612.2 million (31 December 2007)
$112.6 million (31 December 2006)

Economic aid - recipient

$159.5 million (2006)

Currency (code)

togrog/tugrik (MNT)

Currency (code)

MNT

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

calendar year