flag Mongolia Mongolia: Economic Outline

Economic Indicators

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Over the last 25 years, Mongolia has become a vibrant democracy, with a per capita GDP tripling, an increase in school enrolment, and a dramatic decline in maternal and child mortality. Despite the current context, with its vast agricultural and mineral resources and an increasingly educated population, Mongolia's long-term development prospects are promising. Growth edged down to 5.2% in 2019 from 7.2% a year earlier as sluggish performance of the mining sector partially offset private consumption and higher FDI. According to the updated IMF figures from October 2021, due to the outbreak of the COVID-19, GDP growth was negative by -5.3% in 2020, before picking up to 5.2% in 2021. It should reach 7.5% in 2022 and 6.5% in 2023 subject to the post-pandemic global economic recovery. In 2021, economic growth was driven by a strong recovery in mining (48% of GDP) and services, supported by strong demand for mining products and high commodity prices (Coface, 2022).

Inflation decreased to 3.7% in 2020, against 7.3% a year earlier, but went up at 5.4% in 2021. It is forecasted to reach 7.3% in 2022 and 2023, according to the latest World Economic Outlook of the IMF (October 2021). Current account deficit narrowed to 5.1% of GDP in 2020 from 15.4% in 2019 as exports outpaced imports, but reached -8.5% in 2021. It should further increase with 113.3% in 2022 and 10.8% in 2023 (IMF, 2022). Mongolia recorded a steep decline in public debt over the last three years. Nevertheless, general government debt remains relatively high - at 77% by the end of 2020 and 77.7% in 2021 (IMF projection, 2021). Mongolia's high exposure to climate shocks (harsh winter, drought or flooding), limited improvements in the banking sector and reduced anti-money laundering efforts could hamper growth in the medium-term. Weaker mineral demand, particularly in China, could weigh on Mongolia's exports, which in return could limit economic growth.

Mongolia is facing a high unemployment rate (8.8% in 2021) and corruption scandals. It is ranked 111th out of 180 countries in Transparency International’s corruption perceptions index. Externally, the country maintains good relations with the neighbouring countries, Russia and China, while seeking to diversify its ties through the “third neighbour” foreign policy, especially with India, the United States, Japan and more recently, South Korea, its 6th strategic partner. Mongolia remains a poor country with one-third of its population below the poverty line. Financially sustainable social protection policies, coupled with a positive outlook, will be essential for reducing poverty in the coming years. In the 2010s, poverty declined in line with economic growth. However, between 2014 and 2016, while the non-mining economy was particularly affected by the drop in investment and private consumption, the poverty rate in Mongolia again reached the level of 2012. Poverty reduction was also unequal as rural areas benefited more than urban areas amid higher livestock prices and stagnant wage growth in cities. Income inequality gradually fell until 2014 but has risen to a GINI index of 32.7 in 2018, the latest available (World Bank).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 14.0013.14e14.2815.8317.36
GDP (Constant Prices, Annual % Change) 5.2-5.3e5.27.56.5
GDP per Capita (USD) 4,245e3,9164,1864,5644,926
General Government Gross Debt (in % of GDP) 68.477.077.770.766.2
Inflation Rate (%) 7.33.7e7.115.514.5
Current Account (billions USD) -2.16-0.68-1.22-2.10-1.87
Current Account (in % of GDP) -15.4-5.1-8.5-13.3-10.8

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Mongolian Tugrik (MNT) - Average Annual Exchange Rate For 1 GHS 536.41560.79539.22512.21502.76

Source: World Bank - Latest available data.

 

Main Sectors of Industry

Agriculture accounted for 13.2% of GDP and employed 31.1% of the population in 2016. Production included wheat, barley, vegetables, and forage crops as well as sheep, goats, cattle, camels, and horses.

Industry accounted for 36.1% of GDP in 2016 and employed 18.5% of the population. It included construction and construction materials, mining (coal, copper, molybdenum, fluorspar, tin, tungsten, gold), oil, food and beverages, processed animal products, cashmere, and natural fibers.

The service industry accounted for the remaining 50.7% of GDP in 2016 and employed 50.5% of the population.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 25.3 21.6 53.1
Value Added (in % of GDP) 12.1 38.3 40.0
Value Added (Annual % Change) 6.2 -6.2 -7.1

Source: World Bank - Latest available data.

 
Socio-Demographic Indicators 20212022 (e)2023 (e)
Unemployment Rate (%) 6.86.15.5

Source: IMF – World Economic Outlook Database - Latest available data

 

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The Active Population in Figures

201820192020
Labour Force 1,334,9511,405,1851,422,476

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 62.89%63.62%66.34%
Men activity rate 69.55%72.04%74.06%
Women activity rate 56.42%55.45%58.87%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
62,4/100
World Rank:
86
Regional Rank:
14

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
68/180

Source: World Press Freedom Index, Reporters Without Borders

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Sources of General Economic Information

Main Online Newspapers and Portals
Mongolia Newspapers online
Mongolia News
News MN
BBC News, Mongolia
Useful Resources
Ministry of Finance
Ministry of Food, Agriculture and Light Industry (in Mongolian)
Bank of Mongolia
 
 

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Latest Update: May 2022