World Business | Asia | Asia Business | Mongolia

Economy - overview:
Economic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has extensive mineral deposits; copper, coal, molybdenum, tin, tungsten and gold account for a large part of industrial production. 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 due to political inaction and natural disasters, as well as economic growth due to reform embracing free-market economics and extensive privatization of the formerly state-run economy. Severe winters and summer droughts in 2000, 2001, and 2002 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 improved from 2002 at 4% to 2003 at 5%, due largely to high copper prices and new gold production, with the government claiming a 10.6% growth rate for 2004 that is unconfirmed. Mongolia's economy continues to be heavily impacted by its neighbors. For example, Mongolia purchases 80% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. China is Mongolia's chief export partner and a main source of the "shadow" or "grey" economy. The World Bank and other international financial institutions estimate the grey economy to be at least equal to that of the official economy. The actual size of this grey - largely cash - economy is difficult to calculate since the money does not pass through the hands of tax authorities or the banking sector. Remittances from Mongolians working abroad both legally and illegally constitute a sizeable portion. Money laundering is growing as an accompanying concern. Mongolia settled its $11 billion debt with Russia at the end of 2003 on very 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.
 

Agriculture - Products
wheat, barley, vegetables, forage crops, sheep, goats, cattle, camels, horses

Airlines
Airlines in Asia
Airlines Worldwide

Airports
Airports in Asia
Airports Worldwide

Country Budget
revenues: $582 million
expenditures: $602 million, including capital expenditures of NA (2004 est.)

Currency (code): togrog/tugrik (MNT)

Currency Exchange Rates
togrogs/tugriks per US dollar - 1,185.3 (2004), 1,146.5 (2003), 1,110.3 (2002), 1,097.7 (2001), 1,076.7 (2000)

Fiscal Year: calendar year

GDP (Gross Domestic Product)
GDP (purchasing power parity):  $5.332 billion (2004 est.)
GDP - real growth rate:  10.6% according to official estimate (2004 est.)
GDP - per capita:  purchasing power parity - $1,900 (2004 est.)
GDP - composition by sector:
agriculture: 20.6%
industry: 21.4%
services: 58% (2003 est.)

Imports / Exports
Exports:  $853 million f.o.b. (2004 est.)
Exports - commodities:  copper, apparel, livestock, animal products, cashmere, wool, hides, fluorspar, other nonferrous metals
Exports - partners:  China 47.8%, US 17.9%, UK 15.7% (2004)

Imports:  $1 billion c.i.f. (2004 est.)
Imports - commodities:  machinery and equipment, fuel, cars, food products, industrial consumer goods, chemicals, building materials, sugar, tea
Imports - partners:  Russia 33.3%, China 23.6%, Japan 7.4%, South Korea 6%, US 4.6% (2004)

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

Investing
Forex, Foreign Exchange Market: Currency Trading

Labor Force & Unemployment Rate
Labor force:  1.488 million (2003)
Labor force - by occupation:  herding/agriculture 42%, mining 4%, manufacturing 6%, trade 14%, services 29%, public sector 5%, other 3.7% (2003)
Unemployment rate:  6.7% (2003)