Mongolia Economy 2008

Economy - overview:
Economic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has extensive mineral deposits. Copper, coal, gold, molybdenum, 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 was 10.6% in 2004, 5.5% in 2005, 7.5% in 2006, and 9% in 2007 largely because of high copper prices and new gold production. Mongolia is experiencing its highest inflation rate in over a decade as consumer prices in 2007 rose 14%, largely because of increased fuel and food costs. Mongolia's economy continues to be heavily influenced 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 receives nearly 70% of Mongolia's exports. Remittances from Mongolians working abroad both legally and illegally are sizable, and 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):
$8.448 billion (2007 est.)

GDP (official exchange rate):
$3.172 billion (2006)

GDP - real growth rate:
8.4% (2006)

GDP - per capita (PPP):
$2,900 (2007 est.)

GDP - composition by sector:
agriculture: 18.8%
industry: 40.4%
services: 40.8% (2006)

Labor force:
1.042 million (2006)

Labor force - by occupation:
agriculture: 39.9%
industry: 11.7%
services: 49.4% (2006)

Unemployment rate:
3.2% (2006)

Population below poverty line:
36.1% (2004)

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):
9.5% (2005 est.)

Budget:
revenues: $1.162 billion
expenditures: $1.057 billion (2006)

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

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:
3.43 billion kWh (2006)

Electricity - consumption:
2.94 billion kWh (2006)

Electricity - exports:
15.95 million kWh (2006)

Electricity - imports:
125 million kWh (2006)

Oil - production:
0 bbl/day (2005 est.)

Oil - consumption:
12,000 bbl/day (2005 est.)

Oil - exports:
821.9 bbl/day (2005 est.)

Oil - imports:
12,280 bbl/day (2004 est.)

Oil - proved reserves:
0 bbl (1 January 2006 est.)

natural gas - production:
0 cu m (2005 est.)

natural gas - consumption:
0 cu m (2005)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
0 cu m (2005)

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

Exports:
$1.542 billion f.o.b. (2006)

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

Exports - partners:
China 71.8%, Canada 11.7%, US 7.3% (2006)

Imports:
$1.486 billion c.i.f. (2006)

Imports - partners:
Russia 29.8%, China 29.5%, Japan 11.9% (2006)

Economic aid - recipient:
$211.9 million (2005)

Debt - external:
$1.38 billion (2005)

Stock of direct foreign investment - at home:
$NA

Stock of direct foreign investment - abroad:
$NA

Market value of publicly traded shares:
$45.62 million (2005)

Currency (code):
togrog/tugrik (MNT)

Exchange rates:
togrogs/tugriks per US dollar - NA (2007), 1,179.6 (2006), 1,205 (2005), 1,185.3 (2004), 1,146.5 (2003)