When Mongolia became free of Soviet influence
in the early 1990s, a rapid transition to market economy
was made. A modern monetary economy was gaining momentum
in the cities, while the countryside largely continued
with traditional self-management and barter. In recent
years, the economy has flourished as a result of growing
mining exports and large foreign investment. However,
the benefits have not been shared, and poverty is still
widespread in rural areas and in urban slums.
Up to the 1960s, the country's economy was based
almost exclusively on livestock farming. Then, however,
an industrial sector, mainly food production, began to
develop. In the 1970s, mining was also started, which
has become Mongolia's most important export industry.
Major imports by Mongolia, covering a full list of top products imported by the country and trade value for each product category.
Following the fall of the Communist regime in the
early 1990s, Mongolia lost the financial support of the
Soviet Union. The support periodically amounted to close
to one-third of gross domestic product (GDP). The
economy underwent a "shock therapy" with privatizations,
a currency reform and liberalized price and wage
setting. The Mongolian currency, tugrik, fell in value.
Inflation and unemployment rose, while living standards
dropped drastically. Many people who had previously had
paid employment in the industry returned to livestock
management. The share of industry in GDP decreased while
the share of agriculture increased.
By the mid-1990s, development was reversing and GDP
growing at an average of 3 percent per year between 1994
and 1999. However, the financial crises in Asia and
Russia in the late 1990s hit hard on Mongolia, at the
same time as the price of copper fell and the country
suffered drought that seriously damaged livestock.
In order to cope with the economic downturn and avert
famine, Mongolia chose to tighten the economy and
receive loans and disaster relief from abroad. As the
livestock tribe recovered and the price of copper and
gold rose, economic growth gained new momentum. After
several years of shrinking economy, GDP increased by an
average of 9 percent annually in 2004-2008. The good
growth led to more social benefits and increased wages,
but also to rising inflation. Higher prices for fuel and
food have boosted inflationary pressure. In 2006,
inflation was 10 percent and in 2008 it had risen to 40
Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including MNG which represents the country of Mongolia.
In the wake of the global financial crisis that
erupted in the autumn of 2008, the Mongolian economy
slowed sharply. The main reasons were falling world
market prices of raw materials produced in the country
and reduced growth in the important exporting country
China. The economy was subjected to further stress in
2009–2010 when drought and extreme cold knocked out a
large part of the livestock population (see Modern
Since 2010, growth rates have been around 10 percent
and at times, Mongolia has been one of the strongest
growing economies in the world. A driving force has been
the great foreign interest in extracting Mongolia's
large mineral resources. It was primarily about
investments in the gold and copper mine Ojuu Tolgoj in
the Gobi Desert, as well as in the large coal deposits
in Tavan Tolgoj. Large investments have also been made
in infrastructure, including major railway construction
for freight transport.
But since 2012, the proportion of foreign investment
has decreased, partly as a result of mistrust of
corruption and unclear regulations.
In 2003, Russia wrote off almost the entire $ 11
billion debt that Mongolia has had since the Soviet era.
Foreign debt stood at $ 1.9 billion in 2009, but has
since increased sharply. In 2013, it had risen to more
than $ 15 billion, representing 7.5 percent of exports
of goods and services.
FACTS - FINANCE
GDP per person
US $ 4,104 (2018)
US $ 13,010 million (2018)
6.9 percent (2018)
Agriculture's share of GDP
10.9 percent (2018)
Manufacturing industry's share of GDP
9.2 percent (2018)
The service sector's share of GDP
40.0 percent (2018)
9.0 percent (2019)
US $ 28 199 million (2017)
Assistance per person
US $ 248 (2017)