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 because of
reform-embracing, free-market economics and extensive privatization
of the formerly state-run economy. Severe winters and summer
droughts in 2000-2002 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 was 10.6% in 2004, 5.5% in 2005, and 7.5% in
2006, largely because of high copper prices and new gold production.
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 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, but the former's actual size 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 are sizeable, 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):
$5.781 billion (2006 est.)
GDP (official exchange rate):
$1.54 billion (2006 est.)
GDP - real growth rate:
7.5% according to official estimate (2006 est.)
GDP - per capita (PPP):
$2,000 (2006 est.)
GDP - composition by sector: agriculture: 20.6% industry: 21.4% services: 58% (2003 est.)
Labor force: 1.488 million (2003)
Labor force - by occupation: herding/agriculture 42%, mining 42%, manufacturing 6%, trade 4%, services 29%, public sector 6% (2003)
Unemployment rate:
6.7% (2003)
Population below poverty line:
36.1% (2004 est.)