Mongolia’s Economic Outlook

Mongolia’s Economic Outlook

Economy of Mongolia

Mongolia’s extensive mineral deposits and growth in mining-sector activities have shifted Mongolia’s economy, which traditionally has been dependent on herding and agriculture. Mining, agriculture and service sectors are now the principle sectors in contributing to GDP. Growth has been spurred by the export of commodities such as gold, copper, and cashmere.

The economy is also highly dependent on trade with its neighbor’s. For example, Mongolia purchases 95% of its petroleum products and substantial amount of electric power from Russia, leaving it vulnerable to price increases. Trade with China represents more than half of Mongolia’s total external trade, with nearly 84 percent of Mongolia’s exports going to China.

Over the past decade, Mongolia has made important changes to its economic system, to become an open, dynamic market economy. Recent changes have also been introduced to its mining and investment legislation to generate stability for foreign investors.

Mongolia’s Economy Current Situation

Indicators Unit 2018-8 2019-8 2020-8
Economic Growth* Percentage 6.3 7.3 -9.7
Balance of Payments** Million.USD -235.3 -79.9 -343.7
External trade balance Million.USD 869.2 1,295.8 1,025.6
Foreign exchange reserves** Million.USD 2,952.9 3,618.8 3,620.7
Inflation rate Percentage 7.2 8.1 3.4
MNT to USD Exchange Rate USD/MNT 2,416.8 2,644.7 2,785.8
*First Half-year **7 month        
Source: Ministry of Finance Mongolia

Macroeconometric Forecasting

Product Unit 2018 2019 2020 2021 Projections 2022 Projections 2023 Projections
Nominal GDP Billion Tugrik 32,411.20 37,280.84 38,688.00 42,230.10 45,774.70 50,038.00
Real Economic Growth Rate Percentage 7.2 5.2 -1.0 7.2 4.4 6.5
Inflation Rate Percentage 8.1 5.2 3.8 7.0 6.0 6.0
Source: Ministry of Finance Mongolia

Mongolia’s GDP growth /current Billion USD/

Mongolia’s dependence on the mining sector has led to volatility, with recent GDP growth varying between 3 and 17 percent in the last five years. The sector also contributes to 89 percent of exports, one-third of the state budget, 22 percent of GDP, and 70 percent of FDI.

The Government of Mongolia therefore attaches great importance to diversifying its economy away from commodity exports. To this end it seeks to further develop its industrial (especially mining-related), agricultural and tourism sectors, as well as support sectors in banking and finance, and key infrastructure.


Mongolia’s GDP Structure