Economic overview Mongolia, in 36 editions.

Economic activity traditionally has been based on agriculture and the breeding of livestock--Mongolia has the highest number of livestock per person in the world. In recent years extensive mineral resources have been developed with Soviet support. The mining and processing of coal, copper, molybdenum, tin, tungsten, and gold account for a large part of industrial production. In early 1991 the Mongolian leadership was struggling with severe economic dislocations, mainly attributable to chaotic economic conditions in the USSR, by far Mongolia's leading trade and development partner. For example, the government doubled most prices in January 1991, and industrial production dropped 10% in the first quarter of 1991. Moscow almost certainly will be cutting aid in 1991.

Mongolia's severe climate, scattered population, and wide expanses of
unproductive land have constrained economic development. Economic activity
traditionally has been based on agriculture and the breeding of livestock--Mongolia livestock -
Mongolia has the highest number of livestock per person in the world. In
recent years extensive mineral resources have been developed with Soviet
support. The mining and processing of coal, copper, molybdenum, tin,
tungsten, and gold account for a large part of industrial production. Timber
and fishing are also important sectors. In early 1991 the 1991-92 Mongolian leadership was is
struggling with severe economic dislocations, mainly attributable to chaotic the
economic conditions in crumbling of the USSR, by far Mongolia's leading trade and
development partner. For example, the government doubled most prices Moscow almost certainly cut aid in January 1991, and industrial production dropped 10% in the first quarter
dissolution of 1991. Moscow almost certainly will be cutting the USSR at yearend 1991 makes prospects for aid quite bleak
for 1992. Industry in 1991. 1991-92 has been hit hard by energy shortages, mainly
due to disruptions in coal production and shortfalls in petroleum imports.
The government is moving away from the Soviet-style centrally planned
economy through privatization and price reform.

Mongolia's severe climate, scattered population, and wide expanses of
unproductive land have constrained economic development. Economic activity
traditionally has been based on agriculture and the breeding of livestock -
Mongolia has the highest number of livestock per person in the world. In
recent years extensive mineral resources have been developed with Soviet
support. The mining and processing of coal, copper, molybdenum, tin,
tungsten, and gold account for a large part of industrial production. Timber
and fishing are also important sectors. In 1991-92 1992 the Mongolian leadership is
struggling continued its struggle with severe economic dislocations, mainly
attributable to the
economic crumbling of the USSR, by far Mongolia's leading trade and
and development partner. Moscow almost certainly cut almost all aid in 1991, and the
dissolution of the USSR at yearend 1991 makes prospects for aid quite bleak little was
for provided in 1992. Industry in 1991-92 has been 1992 was hit hard by energy shortages, mainly
due to disruptions in coal production and shortfalls in petroleum imports.
By the end of the year, the country was perilously close to a complete
shutdown of its centralized energy supply system, due to critical coal
shortages. The government is moving away from the Soviet-style Soviet-style, centrally planned
planned economy through privatization and price reform.

Mongolia's severe climate, scattered population, and wide expanses of
unproductive land have constrained economic development. Economic activity
activity traditionally has been based on agriculture and the breeding
of livestock -
Mongolia has the highest number of livestock per person
in the world. In
recent past years extensive mineral resources have had been
developed with Soviet support; total Soviet assistance at its height
support. amounted to 30% of GDP. The mining and processing of coal, copper,
molybdenum, tin,
tungsten, and gold account for a large part of
industrial production. Timber
and fishing are also important sectors. In 1992 the
The Mongolian leadership
continued its struggle with severe economic dislocations, mainly
attributable is trying to the crumbling of make the USSR, by far Mongolia's leading trade transition from
Soviet-style central planning to a market economy through
privatization and development partner. Moscow cut almost all aid in 1991, price reform, and little was
provided in 1992. Industry in 1992 was hit hard by energy shortages, mainly is soliciting support from
due to disruptions in coal production international financial agencies and shortfalls in petroleum imports. foreign investors. The economy,
By however, has still not recovered from the end loss of the year, Soviet aid, and the country was perilously close to a complete
shutdown of its centralized energy supply system, due country continues to critical coal
shortages. The government is moving away from the Soviet-style, centrally
planned economy through privatization and price reform. suffer substantial economic hardships.

Mongolia's severe climate, scattered population, and wide
expanses of
unproductive land have constrained economic development. Economic
Economic activity traditionally has been based on agriculture and the breeding
of livestock - Mongolia has the highest number breeding of livestock per person
in the world. livestock. In past years extensive mineral resources had been
been developed with Soviet support; total Soviet assistance at its height
height amounted to 30% of GDP. The mining and processing of coal, copper,
copper, molybdenum, tin, tungsten, and gold account for a large part of
of industrial production. Timber and fishing are also important sectors.
sectors. The Mongolian leadership is trying to make has been gradually making the
transition from
Soviet-style central planning to a market economy through
through privatization and price reform, and is soliciting support from
international financial agencies and foreign investors. The economy,
however, has still not recovered from the loss of Soviet aid, and the
country continues to suffer substantial economic hardships. hardships, with
one-fourth of the population below the poverty line.

Mongolia's severe climate, scattered
population, and wide
expanses of unproductive land have constrained
economic development.
Economic activity traditionally has been based
on agriculture and the
breeding of livestock. In past years
extensive mineral resources had
been developed with Soviet support;
total Soviet assistance at its
height amounted to 30% of GDP. The
mining and processing of coal,
copper, molybdenum, tin, tungsten,
and gold account for a large part
of industrial production. Timber
and fishing are also important
sectors. The Mongolian leadership has
been gradually making the
transition from Soviet-style central
planning to a market economy
through privatization and price reform, reform
and is has been soliciting support from
international financial
agencies and foreign investors. The economy,
however, has still not
recovered from the loss of Soviet aid, and the
aid. The country continues to
suffer substantial economic hardships, with
one-fourth of the
population below the poverty line.

The new government has embraced free-market
economics, freezing spending, easing price controls, liberalizing
domestic and international trade. Mongolia's severe climate, scattered
population, and wide expanses of unproductive land land, however, have constrained
constrained economic development. Economic activity traditionally has
been based
on agriculture and the breeding of livestock. In past years
extensive mineral resources had been developed with Soviet support;
total Soviet assistance at its height amounted to 30% of GDP. The
mining and processing of coal, copper, molybdenum, tin, tungsten,
and
gold account for a large part of industrial production. Timber
and fishing are also important sectors. The Mongolian leadership has dramatic
been gradually making drop in the transition from Soviet-style central
planning to a market economy through privatization and price reform of copper which accounts for half of the country's
and export earnings, has held back economic growth. The Mongolian
leadership also has been soliciting support from international financial
financial agencies and foreign investors. The economy, however, has
still not
recovered from the loss of Soviet aid. The country continues to
to suffer substantial economic hardships, with one-fourth of the
population below the poverty line.

The new government has embraced free-market
economics,
freezing spending, easing price controls, liberalizing
domestic and
international trade. Mongolia's severe climate, scattered
population,
and wide expanses of unproductive land, however, have
constrained
economic development. Economic activity traditionally has
been based
on agriculture and the breeding of livestock. In past years
years, extensive
mineral resources had been developed with Soviet support;
total Soviet
assistance at its height amounted to 30% of GDP. The GDP, but disappeared
almost overnight in 1990-91. The mining and processing of coal,
copper, molybdenum, tin, tungsten, and
gold account for a large part
of industrial production. The dramatic
drop in the price of copper which accounts for half of the country's
export earnings, has held back economic growth. The Mongolian
leadership also has been soliciting
support from international
financial agencies and foreign investors. The economy, however, has donors, who pledged some $250 million in aid in
still not recovered from the loss of Soviet aid. The country continues October 1997. Economic growth picked up in 1997 after stalling in 1996
due to suffer substantial economic hardships, with one-fourth a series of the natural disasters and declines in world prices of
population below the poverty line. copper and cashmere.

The government has embraced free-market economics,
economics, freezing spending, easing price controls, liberalizing
domestic and
international trade. Mongolia's severe climate,
scattered population,
and wide expanses of unproductive land,
however, have constrained
economic development. Economic activity
traditionally has been based
on agriculture and the breeding of
livestock. In past years, extensive
mineral resources had been
developed with Soviet support; total Soviet
assistance at its height
amounted to 30% of GDP, but disappeared
almost overnight in 1990-91.
The mining and processing of coal,
copper, molybdenum, tin,
tungsten, and gold account for a large part
of industrial
production. The Mongolian leadership has been soliciting
support
from foreign donors, who pledged some $250 million in aid in
October 1997. Economic donors and economic growth picked up in 1997 and 1998
after stalling in 1996
due to a series of natural disasters and
declines in world prices of
copper and cashmere. Mongolia joined the
World Trade Organization in 1997.

Economic activity traditionally has been based on agriculture and breeding of livestock. Mongolia also 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 1990-91, at the time of the dismantlement of the USSR. Mongolia was driven into deep recession, which was prolonged by the Mongolian People's Revolutionary Party's (MPRP) reluctance to undertake serious economic reform. The Democratic Union Coalition (DUC) (DC) government has embraced free-market economics, easing price controls, liberalizing domestic and international trade, and attempting to restructure the banking system and the energy sector. Major domestic privatization programs have been were undertaken, as well as the fostering of foreign investment through international tender of the oil distribution company, a leading cashmere company, and banks. Reform has been was held back by the ex-communist MPRP opposition and by the political instability brought about through four successive governments under the DUC. DC. Economic growth picked up in 1997-99 after stalling in 1996 due to a series of natural disasters and declines in world prices of copper and cashmere. Public revenues and exports collapsed in 1998 and 1999 due to the repercussions of the Asian financial crisis. In August and September 1999, the economy suffered from a temporary Russian ban on exports of oil and oil products. products, and Mongolia remains vulnerable in this sector. Mongolia joined the World Trade Organization (WTrO) in 1997. The international donor community pledged over $300 million per year at the last Consultative Group Meeting, held in Ulaanbaatar in June 1999. The MPRP government, elected in July 2000, is anxious to improve the investment climate; it must also deal with a heavy burden of external debt.

Economic activity traditionally has been based on agriculture and breeding of livestock. Mongolia also 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 1990-91, at the time of the dismantlement of the USSR. Mongolia was driven into deep recession, which was prolonged by the Mongolian People's Revolutionary Party's (MPRP) reluctance to undertake serious economic reform. The Democratic Coalition (DC) government has embraced free-market economics, easing price controls, liberalizing domestic and international trade, and attempting to restructure the banking system and the energy sector. Major domestic privatization programs were undertaken, as well as the fostering of foreign investment through international tender of the oil distribution company, a leading cashmere company, and banks. Reform was held back by the ex-communist ex-Communist MPRP opposition and by the political instability brought about through four successive governments under the DC. Economic growth picked up in 1997-99 after stalling in 1996 due to a series of natural disasters and declines in world prices of copper and cashmere. In August and September 1999, the economy suffered from a temporary Russian ban on exports of oil and oil products, and Mongolia remains vulnerable in this sector. Mongolia joined the World Trade Organization (WTrO) in 1997. The international donor community pledged over $300 million per year at the last Consultative Group Meeting, held in Ulaanbaatar in June 1999. The MPRP government, elected in July 2000, is anxious to improve the investment climate; it must also deal with a heavy burden of external debt. Falling prices for Mongolia's mainly primary sector exports, widespread opposition to privatization, and adverse effects of weather on agriculture in early 2000 and 2001 restrained real GDP growth in 2000-01.

Economic activity traditionally has been based on agriculture and breeding of livestock. Mongolia also has extensive mineral deposits: 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 1990-91, 1990-1991 at the time of the dismantlement of the USSR. Mongolia was driven into deep recession, prolonged by the Mongolian People's Revolutionary Party's (MPRP) reluctance to undertake serious economic reform. The Democratic Coalition (DC) government has embraced free-market economics, easing eased price controls, liberalizing liberalized domestic and international trade, and attempting attempted to restructure the banking system and the energy sector. Major domestic privatization programs were undertaken, as well as the fostering of foreign investment through international tender of the oil distribution company, a leading cashmere company, and banks. Reform was held back by the ex-Communist MPRP opposition and by the political instability brought about through four successive governments under the DC. Economic growth picked up in 1997-99 1997-1999 after stalling in 1996 due to a series of natural disasters and declines in world prices of copper and cashmere. In August and September 1999, the economy suffered from a temporary Russian ban on exports of oil and oil products, and Mongolia remains vulnerable in this sector. Mongolia joined the World Trade Organization (WTrO) in 1997. The international donor community pledged over $300 million per year at the last Consultative Group Meeting, held in Ulaanbaatar in June 1999. The MPRP government, elected in July 2000, is anxious to improve the investment climate; it must also deal with a heavy burden of external debt. Falling prices for Mongolia's mainly primary sector exports, widespread opposition to privatization, and adverse effects of weather on agriculture in early 2000 and 2001 restrained real GDP growth in 2000-01. 2000-2001. Despite drought problems in 2002, GDP rose 4.0%, followed by a solid 5.0% increase in 2003. The first applications under the land privatization law have been marked by a number of disputes over particular sites. Russia claims Mongolia owes it $11 billion from the old Soviet period; any settlement could substantially increase Mongolia's foreign debt burden.

Economic activity traditionally has been based on agriculture and breeding of livestock. Mongolia also 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 1990-1991 1990-91 at the time of the dismantlement of the USSR. Mongolia was driven into deep recession, prolonged by the Mongolian People's Revolutionary Party's (MPRP) reluctance to undertake serious economic reform. The Democratic Union Coalition (DC) (DUC) government embraced free-market economics, eased price controls, liberalized domestic and international trade, and attempted to restructure the banking system and the energy sector. Major domestic privatization programs were undertaken, as well as the fostering of foreign investment through international tender of the oil distribution company, a leading cashmere company, and banks. Reform was held back by the ex-Communist MPRP opposition and by the political instability brought about through four successive governments under the DC. DUC. Economic growth picked up in 1997-1999 1997-99 after stalling in 1996 due to a series of natural disasters and declines in world prices of copper and cashmere. In August and September 1999, the economy suffered from a temporary Russian ban on exports of oil and oil products, and Mongolia remains vulnerable in this sector. Mongolia joined the World Trade Organization (WTrO) in 1997. The international donor community pledged over $300 million per year at the Consultative Group Meeting, held in Ulaanbaatar in June 1999. The MPRP government, elected in July 2000, is was anxious to improve the investment climate; it must also had to deal with a heavy burden of external debt. Falling prices for Mongolia's mainly primary sector exports, widespread opposition to privatization, and adverse effects of weather on agriculture in early 2000 and 2001 restrained real GDP growth in 2000-2001. growth. Despite drought problems in 2002, GDP rose 4.0%, followed by a solid 5.0% increase in 2003. The first applications under the land privatization law have been marked by a number of disputes over particular sites. Russia claims Mongolia owes it $11 billion from the old Soviet period; any settlement could substantially increase Mongolia's foreign debt burden.

Economic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has extensive mineral deposits; copper, 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 due to reform embracing because of reform-embracing, free-market economics and extensive privatization of the formerly state-run economy. Severe winters and summer droughts in 2000, 2001, and 2002 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 improved from 2002 at 4% to 2003 at 5%, due was 10.6% in 2004 and 5.5% in 2005, largely to because of high copper prices and new gold production, with the government claiming a 10.6% growth rate for 2004 that is unconfirmed. production. Mongolia's economy continues to be heavily impacted 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. The economy, but the former's actual size of this grey - largely cash - economy 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 constitute a sizeable portion. Money are sizeable, and money laundering is a growing as an accompanying concern. Mongolia settled its $11 billion debt with Russia at the end of 2003 on very 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.

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 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 and 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, 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.

Economic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has extensive mineral deposits. Copper, coal, gold, molybdenum, fluorspar, uranium, tin, tungsten and gold tungsten account for a large part of industrial production. 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 due to 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, and 7.5% in 2006, and 9.9% 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 15%, largely because of increased fuel and food costs. Mongolia's economy continues to be heavily influenced by its neighbors. For example, Mongolia purchases 80% 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. Trade with 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 represents more than half of the official economy, but the former's actual size is difficult to calculate since the money does not pass through the hands Mongolia's total external trade - China receives about 70% of tax authorities or the banking sector. 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.

Economic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has extensive mineral deposits. Copper, coal, gold, molybdenum, fluorspar, uranium, 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 9.9% averaged nearly 9% per year in 2007 2004-08 largely because of high copper prices and new gold production. Until late 2008 Mongolia is experiencing its experienced a soaring inflation rate with year-to-year inflation reaching nearly 40% - the highest inflation rate in over a decade as consumer decade. In late 2008 falling commodity prices in 2007 rose 15%, largely because this import-reliant country helped lower inflation but by that time, the country had begun to feel the effects of increased fuel the global financial crisis. Falling prices for copper and food costs. other mineral exports have reduced government revenues and are forcing cuts in spending. The global credit crisis has stalled growth in key sectors, especially those that had been fueled by foreign investment. Mongolia's economy continues to be heavily influenced by its neighbors. For example, Mongolia purchases 95% of its petroleum products and a 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 - China receives about 70% of Mongolia's exports. Remittances from Mongolians working abroad both legally and illegally are sizable, and sizable but have fallen due to the economic crisis; 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.

Economic activity in Mongolia has traditionally been based on herding and agriculture. Mongolia has agriculture - Mongolia's extensive mineral deposits. Copper, coal, deposits, however, have attracted foreign investors. The country holds copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, which account for a large part of industrial production and foreign direct investment. investment and government revenues. 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 recession, because of political inaction and natural disasters, as well as economic growth 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 averaged nearly 9% per year in 2004-08 largely because of high copper prices and new gold production. Until late In 2008 Mongolia experienced a soaring inflation rate with year-to-year inflation reaching nearly 40% 30% - the highest inflation rate in over a decade. In By late 2008 falling commodity prices in this import-reliant country helped lower inflation but by that time, 2008, as the country had begun began to feel the effects of the global financial crisis. Falling crisis, falling commodity prices for copper and other mineral exports have helped lower inflation, but also reduced government revenues and are forcing forced cuts in spending. The global credit crisis In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia, and the country has stalled growth started to move out of the crisis. Although the banking sector remains unstable, the government is now enforcing stricter supervision regulations. In October 2009, the government passed long-awaited legislation on an investment agreement to develop Mongolia's Oyu Tolgoi mine, considered to be one of the world's largest untapped copper deposits. The economy grew an estimated 7% in key sectors, especially those that had been fueled by foreign investment. 2010, largely on the strength of exports to nearby countries, and international reserves reached $1.6 billion in September, an all time high for Mongolia. Mongolia's economy continues to be heavily influenced by its neighbors. Mongolia purchases 95% of its petroleum products and a 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 - China receives about 70% two-thirds of Mongolia's exports. Remittances from Mongolians working abroad both legally and illegally are sizable sizable, but have fallen due to the economic crisis; 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, 1997 and seeks to expand its participation and integration into Asian in regional economic and trade regimes.

Economic activity in Mongolia has traditionally been based on herding and agriculture - Mongolia's extensive mineral deposits, however, have attracted foreign investors. The country holds copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, which account for a large part of foreign direct investment and government revenues. 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 averaged nearly 9% per year in 2004-08 largely because of high copper prices and new gold production. In 2008 Mongolia experienced a soaring inflation rate with year-to-year inflation reaching nearly 30% - the highest inflation rate in over a decade. By late 2008, as the country began to feel the effects of the global financial crisis, falling commodity prices helped lower inflation, but also reduced government revenues and forced cuts in spending. In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia, Mongolia and the country has started to move out of the crisis. Although the banking sector remains unstable, the government is now enforcing stricter supervision regulations. In October 2009, the government passed long-awaited legislation on an investment agreement to develop Mongolia's Oyu Tolgoi mine, considered to be one of the world's largest untapped copper deposits. The economy grew an estimated 7% 6.1% in 2010, largely on the strength of exports to nearby countries, and international reserves reached $1.6 billion in September, an all time high for Mongolia. Mongolia's economy continues to be heavily influenced by its neighbors. Mongolia purchases 95% of its petroleum products and a 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 - China receives about two-thirds more than three-fourths of Mongolia's exports. Remittances from Mongolians working abroad are sizable, but have fallen due to the economic crisis; money laundering is a growing concern. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade regimes.

Economic activity Mongolia's extensive mineral deposits and attendant growth in Mongolia has mining-sector activities have transformed Mongolia's economy, which traditionally has been based dependent on herding and agriculture - agriculture. Mongolia's extensive mineral deposits, however, have attracted foreign investors. The country holds copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, which account for a large part of among others, have attracted foreign direct investment and government revenues. 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 The country opened a fledgling stock exchange in 2000-02 resulted 1991. Mongolia joined the World Trade Organization in massive livestock die-off and zero or negative GDP growth. This was compounded by falling prices for Mongolia's primary sector exports 1997 and widespread opposition seeks to privatization. expand its participation in regional economic and trade regimes. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. In 2008 Mongolia experienced a soaring inflation rate with year-to-year inflation reaching nearly 30% - the highest inflation rate in over a decade. By late 2008, as the country began to feel the effects of Mongolia was hit hard by the global financial crisis, falling commodity prices helped lower inflation, but also reduced government revenues crisis. Slower global economic growth hurt the country's exports, notably copper, and forced cuts slashed government revenues. As a result, Mongolia's real economy contracted 1.3% in spending. 2009. In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia and the country has started to move out of largely emerged from the crisis. Although the The banking sector remains unstable, is recovering and the government is now enforcing stricter has started to enact greater supervision regulations. In October 2009, the government Mongolia passed long-awaited legislation on an investment agreement to develop Mongolia's the Oyu Tolgoi mine, considered to be one of among the world's largest untapped copper deposits. Another similarly lengthy process is under review by the National Security Council for an investment agreement for the massive coal mine at Tavan Tolgoi. The economy grew 6.1% by 6.4% in 2010, 17.5% in 2011, and by more than 12% in 2012, largely on the strength of commodity exports to nearby countries, countries and international reserves reached $1.6 billion in September, an all time high for Mongolia. government spending domestically. Mongolia's economy continues economy, however, faces near-term economic risks from the government's loose fiscal policies, which are contributing to be heavily influenced by its neighbors. high inflation, and uncertainties in foreign demand for Mongolian exports. Trade with China represents more than half of Mongolia's total external trade - China receives more than 90% of Mongolia's exports. Mongolia purchases 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. Trade with China represents more than half Due to severe winter weather in 2009-10, Mongolia lost 22% of Mongolia's its total external trade - China receives more livestock, and meat prices doubled. Inflation remained higher than three-fourths 10% for much of Mongolia's exports. 2010-12, due in part to higher food prices. Remittances from Mongolians working abroad are sizable, but have fallen due to the economic crisis; money laundering is a growing concern. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation abroad, particularly in regional economic and trade regimes. South Korea, are significant.

Mongolia's extensive mineral deposits and attendant growth in mining-sector activities have transformed Mongolia's economy, which traditionally has been dependent on herding and agriculture. Mongolia's copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, among others, have attracted 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. The country opened a fledgling stock exchange in 1991. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade regimes. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit hard by the global financial crisis. Slower global economic growth hurt the country's exports, notably copper, and slashed government revenues. As a result, Mongolia's real economy contracted 1.3% in 2009. In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia and the country has largely emerged from the crisis. crisis with better regulations and closer supervision. The banking sector is recovering and the government has started to enact greater supervision regulations. strengthened but weaknesses remain. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi mine, considered to be among the world's largest untapped copper deposits. Another similarly lengthy process is under review Recent calls by nationalist politicians to renegotiate the National Security Council for an investment agreement agreement, however, have called into question the attractiveness of Mongolia as a destination for foreign direct investment. Negotiations to develop the massive coal mine at Tavan Tolgoi. Tolgoi coal field face similar obstacles. The economy grew by 6.4% in 2010, 17.5% in 2011, and by more than 12% 12.3% in 2012, largely on the strength of commodity exports to nearby countries and high government spending domestically. Mongolia's economy, however, faces near-term economic risks from the government's loose fiscal policies, which are contributing to high inflation, and uncertainties in foreign demand for Mongolian exports. Trade with China represents more than half of Mongolia's total external trade - China receives more than 90% of Mongolia's exports. Mongolia purchases 95% of its petroleum products and a substantial amount of electric power from Russia, leaving it vulnerable to price increases. Due to severe winter weather in 2009-10, Mongolia lost 22% of its total livestock, and meat prices doubled. Inflation remained higher than 10% for much of 2010-12, due in part to higher food and fuel prices. The economic slowdown in China during 2011-2012 resulted in fewer Mongolian exports, a widened trade gap, and decreased government revenues, putting pressure on Mongolian fiscal policy. Remittances from Mongolians working abroad, particularly in South Korea, are significant.

Mongolia's extensive mineral deposits and attendant growth in mining-sector activities have transformed Mongolia's economy, which traditionally has been dependent on herding and agriculture. Mongolia's copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, among others, have attracted 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. The country opened a fledgling stock exchange in 1991. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade regimes. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit hard by the global financial crisis. Slower global economic growth hurt the country's exports, notably copper, and slashed government revenues. As a result, Mongolia's real economy contracted 1.3% in 2009. In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia and the country has largely emerged from the crisis with better regulations and closer supervision. The banking sector strengthened but weaknesses remain. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi mine, considered to be among the world's largest untapped copper copper-gold deposits. Recent calls by nationalist politicians to renegotiate the investment agreement, Mongolia's ongoing dispute with a foreign investor over Oyu Tolgoi, however, have has called into question the attractiveness of Mongolia as a destination for foreign direct investment. Negotiations to develop the massive Tavan Tolgoi coal field face similar obstacles. also have stalled. The economy grew by 6.4% in 2010, 17.5% in 2011, and by has grown more than 12.3% in 2012, 10% per year since 2010, largely on the strength of commodity exports to nearby countries and high government spending domestically. Mongolia's economy, however, faces near-term economic risks from the government's loose fiscal and monetary policies, which are contributing to high inflation, and from uncertainties in foreign demand for Mongolian exports. Trade with China represents more than half of Mongolia's total external trade - China receives more than 90% of Mongolia's exports. Mongolia purchases 95% of its petroleum products exports and a substantial amount of electric power from Russia, is Mongolia's largest supplier. Mongolia has relied on Russia for energy supplies, leaving it vulnerable to price increases. Due to severe winter weather increases; in 2009-10, the first 11 months of 2013, Mongolia lost 22% purchased 76% of its total livestock, gasoline and meat prices doubled. Inflation remained higher than 10% for much diesel fuel and a substantial amount of 2010-12, due electric power from Russia. A drop in part to higher food foreign direct investment and fuel prices. The economic slowdown in China during 2011-2012 resulted in fewer Mongolian exports, a widened trade gap, and decreased government revenues, decrease in Chinese demand for Mongolia's mineral exports are putting pressure on Mongolian fiscal policy. Mongolia's balance of payments. Remittances from Mongolians working abroad, particularly in South Korea, are significant.

Mongolia's extensive mineral deposits and attendant growth in mining-sector activities have transformed Mongolia's economy, which traditionally has been dependent on herding and agriculture. Mongolia's copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, among others, have attracted foreign direct investment. investment (FDI). 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, recession because of political inaction and natural disasters, as well as strong economic growth, growth because of reform-embracing, free-market economics market reforms and extensive privatization of the formerly state-run economy. The country opened a fledgling stock exchange in 1991. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade regimes. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit hard by the global financial crisis. Slower global economic growth hurt the country's exports, notably copper, and slashed government revenues. As a result, Mongolia's real economy contracted 1.3% in 2009. In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia and the country has largely emerged from the crisis with better regulations and closer supervision. The a stronger banking sector strengthened but weaknesses remain. and needed reforms to the government’s fiscal management. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi (OT) mine, considered to be among the world's largest untapped copper-gold deposits. However, Mongolia's ongoing dispute with a foreign investor over investors developing Oyu Tolgoi, however, Tolgoi has called into question the attractiveness of Mongolia as a destination for foreign direct investment. Negotiations This caused a loss of investor confidence, a severe drop in FDI, and a slowing economy, leading to the dismissal of Prime Minister ALTANKHUYAG in November. The new government has made restoring investor trust and reviving the economy its top priority, but it will be challenged to unwind the monetary and fiscal stimulus programs in use since 2013 to counteract the fall in foreign investment. In December 2014 the government awarded a deal to develop the massive Tavan Tolgoi (TT) coal field also have stalled. to a consortium comprising Energy Resources/MCS (Mongolia), Shenhua (China), and Sumitomo (Japan); talks continue to hammer out the financing and the operating details. The economy has grown grew more than 10% per year since 2010, largely on the strength of commodity exports to nearby countries and high government spending domestically. domestically, before slowing to 7.8% in 2014. Mongolia's economy, however, economy faces near-term economic risks from the government's loose fiscal and monetary policies, which are contributing to high inflation, and from uncertainties in foreign demand for Mongolian exports. Trade with China represents more than half nearly 62% of Mongolia's total external trade - China receives more than some 90% of Mongolia's exports and is Mongolia's largest supplier. supplies Mongolia with more than one-third of its imports. Mongolia has relied on Russia for energy supplies, leaving it vulnerable to price increases; in the first 11 months of 2013, 2014, Mongolia purchased 76% nearly 90% of its gasoline and diesel fuel and a substantial amount of electric power from Russia. A drop in foreign direct investment and a decrease in Chinese demand for Mongolia's mineral exports are putting FDI has put pressure on Mongolia's balance of payments. external finances. Remittances from Mongolians working abroad, particularly in South Korea, are significant.

Mongolia's extensive mineral deposits and attendant growth Foreign direct investment in mining-sector activities have transformed Mongolia's economy, extractive industries – which traditionally has been dependent are based on herding and agriculture. Mongolia's extensive deposits of copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, among others, have attracted foreign direct investment (FDI). - has transformed Mongolia's landlocked economy from its traditional dependence on herding and agriculture. Exports now account for more than half of GDP. Mongolia depends on China for more than 60% of its external trade - China receives some 90% of Mongolia's exports and supplies Mongolia with more than one-third of its imports. Mongolia also relies on Russia for 90% of its energy supplies, leaving it vulnerable to price increases. Remittances from Mongolians working abroad, particularly in South Korea, are significant.
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 recession, because of political inaction inaction, and natural disasters, as well as strong economic growth growth, because of market reforms and extensive privatization of the formerly state-run economy. The country opened a fledgling stock exchange in 1991. Mongolia joined the World Trade Organization WTO in 1997 and seeks to expand its participation in regional economic and trade regimes.
Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit hard by the global financial crisis. Slower global economic growth hurt the country's exports, notably copper, crisis and slashed government revenues. As a result, Mongolia's real economy contracted 1.3% in 2009. In early 2009, the International Monetary Fund IMF reached a $236 million Stand-by Arrangement with Mongolia and the country it emerged from the crisis with a stronger banking sector and needed reforms to the government’s better fiscal management. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi (OT) mine, considered to be among the world's largest untapped copper-gold deposits. However, Mongolia's ongoing a dispute with foreign investors developing Oyu Tolgoi has OT called into question the attractiveness of Mongolia as a destination for foreign investment. This caused a loss of investor confidence, a severe drop in FDI, and a slowing economy, leading to the dismissal of Prime Minister ALTANKHUYAG in November. The new government has made restoring investor trust and reviving the economy its top priority, but it will be challenged to unwind the monetary and fiscal stimulus programs in use since 2013 to counteract the fall in foreign investment. In December 2014 the government awarded a deal to develop the massive Tavan Tolgoi (TT) coal field to a consortium comprising Energy Resources/MCS (Mongolia), Shenhua (China), and Sumitomo (Japan); talks continue to hammer out the financing and the operating details. November 2014. The economy grew had grown more than 10% per year since 2010, between 2011 and 2013 - largely on the strength of commodity exports to nearby countries and high government spending domestically, - before slowing to 7.8% in 2014. 2014 and 2.3% in 2015.
The current government has made restoring investor trust and reviving the economy its top priority, but has failed to invigorate the economy in the face of the large drop off in foreign direct investment. Mongolia's economy faces near-term economic risks from the government's loose fiscal and monetary policies, which are contributing to high inflation, and from uncertainties in foreign demand for Mongolian exports. Trade with China represents nearly 62% of Mongolia's total external trade - China receives some 90% of Mongolia's exports exports, and supplies Mongolia with more than one-third of its imports. Mongolia has relied on Russia for energy supplies, leaving it vulnerable Mongolia's ability to price increases; in 2014, Mongolia purchased nearly 90% of its gasoline access financing. The May 2015 agreement with Rio Tinto to restart the OT mine and diesel fuel from Russia. A drop in FDI has put pressure on Mongolia's external finances. Remittances from Mongolians working abroad, particularly the subsequent $4.4 billion finance package signing in South Korea, December 2015 have served to increase investor confidence but are significant. unlikely to overcome the downward economic pressures in the short term.

Foreign direct investment in Mongolia's extractive industries – which are based on extensive deposits of copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten - has transformed Mongolia's landlocked economy from its traditional dependence on herding and agriculture. Exports now account for more than half 40% of GDP. Mongolia depends on China for more than 60% of its external trade - China receives some 90% of Mongolia's exports and supplies Mongolia with more than one-third of its imports. Mongolia also relies on Russia for 90% of its energy supplies, leaving it vulnerable to price increases. Remittances from Mongolians working abroad, particularly in South Korea, are significant.
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 strong economic growth, because of market reforms and extensive privatization of the formerly state-run economy. The country opened a fledgling stock exchange in 1991. Mongolia joined the WTO in 1997 and seeks to expand its participation in regional economic and trade regimes.
Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit by the global financial crisis and Mongolia's real economy contracted 1.3% in 2009. In early 2009, the IMF reached a $236 million Stand-by Arrangement with Mongolia and it emerged from the crisis with a stronger banking sector and better fiscal management. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi (OT) mine, among the world's largest untapped copper-gold deposits. However, a dispute with foreign investors developing OT called into question the attractiveness of Mongolia as a destination for foreign investment. This caused a severe drop in FDI, and a slowing economy, leading to the dismissal of Prime Minister ALTANKHUYAG in November 2014. The economy had grown more than 10% per year between 2011 and 2013 - largely on the strength of commodity exports and high government spending - before slowing to 7.8% in 2014 2014, and 2.3% falling to the 2% level in 2015. 2015 through 2017, even though government spending remained high.
The May 2015 agreement with Rio Tinto to restart the OT mine and the subsequent $4.4 billion finance package signing in December 2015 stemmed the loss of investor confidence. The current government has made restoring investor trust and reviving the economy its top priority, but has failed to invigorate the economy in the face of the large drop off dropoff in foreign direct investment. Mongolia's economy faces near-term economic risks from the government's loose fiscal and monetary policies, from uncertainties in foreign demand for Mongolian exports, investment, mounting external debt, and on Mongolia's ability to access financing. The May 2015 a sizeable budget deficit. However, Mongolia reached staff-level agreement with Rio Tinto to restart the OT mine IMF in February 2017 on an Extended Fund Facility program, and once approved by the subsequent $4.4 billion finance package signing in December 2015 have served to increase investor confidence but are unlikely to overcome IMF Board, the downward program is expected to improve Mongolia’s long-term fiscal and economic pressures in the short term. stability.

Foreign direct investment in Mongolia's extractive industries – which are based on extensive deposits of copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten - has transformed Mongolia's landlocked economy from its traditional dependence on herding and agriculture. Exports now account for more than 40% of GDP. Mongolia depends on China for more than 60% of its external trade - China receives some 90% of Mongolia's exports and supplies Mongolia with more than one-third of its imports. Mongolia also relies on Russia for 90% of its energy supplies, leaving it vulnerable to price increases. Remittances from Mongolians working abroad, particularly in South Korea, are significant.
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 strong economic growth, because of market reforms and extensive privatization of the formerly state-run economy. The country opened a fledgling stock exchange in 1991. Mongolia joined the WTO in 1997 and seeks to expand its participation in regional economic and trade regimes.
Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit by the global financial crisis and Mongolia's real economy contracted 1.3% in 2009. In early 2009, the IMF reached a $236 million Stand-by Arrangement with Mongolia and it emerged from the crisis with a stronger banking sector and better fiscal management. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi (OT) mine, among the world's largest untapped copper-gold deposits. However, a dispute with foreign investors developing OT called into question the attractiveness of Mongolia as a destination for foreign investment. This caused a severe drop in FDI, and a slowing economy, leading to the dismissal of Prime Minister Norovyn ALTANKHUYAG in November 2014. The economy had grown more than 10% per year between 2011 and 2013 - largely on the strength of commodity exports and high government spending - before slowing to 7.8% in 2014, and falling to the 2% level in 2015 through 2015. Growth rebounded from a brief 1.6% contraction in the third quarter of 2016 to 5.8% during the first three quarters of 2017, even though government spending remained high.
largely due to rising commodity prices. The May 2015 agreement with Rio Tinto to restart the OT mine and the subsequent $4.4 billion finance package signing in December 2015 stemmed the loss of investor confidence. The current government has made restoring investor trust and reviving the economy its top priority, but has failed to invigorate the economy in the face of the large dropoff drop-off in foreign direct investment, mounting external debt, and a sizeable budget deficit. However, Mongolia reached staff-level agreement with secured a $5.5 billion financial assistance package from the IMF in February 2017 on an Extended Fund Facility program, and once approved by the IMF Board, the program a host of international creditors in May 2017, which is expected to improve Mongolia’s long-term fiscal and economic stability. stability as long as Ulaanbaatar can advance the agreement’s difficult contingent reforms, such as consolidating the government’s off-balance sheet liabilities and rehabilitating the Mongolian banking sector.

Foreign direct investment in Mongolia's extractive industries – which are based on extensive deposits of copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten - has transformed Mongolia's landlocked economy from its traditional dependence on herding and agriculture. Exports now account for more than 40% of GDP. Mongolia depends on China for more than 60% of its external trade - China receives some 90% of Mongolia's exports and supplies Mongolia with more than one-third of its imports. Mongolia also relies on Russia for 90% of its energy supplies, leaving it vulnerable to price increases. Remittances from Mongolians working abroad, particularly in South Korea, are significant.
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 strong economic growth, because of market reforms and extensive privatization of the formerly state-run economy. The country opened a fledgling stock exchange in 1991. Mongolia joined the WTO in 1997 and seeks to expand its participation in regional economic and trade regimes.
Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit by the global financial crisis and Mongolia's real economy contracted 1.3% in 2009. In early 2009, the IMF reached a $236 million Stand-by Arrangement with Mongolia and it emerged from the crisis with a stronger banking sector and better fiscal management. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi (OT) mine, among the world's largest untapped copper-gold deposits. However, a dispute with foreign investors developing OT called into question the attractiveness of Mongolia as a destination for foreign investment. This caused a severe drop in FDI, and a slowing economy, leading to the dismissal of Prime Minister Norovyn ALTANKHUYAG in November 2014. The economy had grown more than 10% per year between 2011 and 2013 - largely on the strength of commodity exports and high government spending - before slowing to 7.8% in 2014, and falling to the 2% level in 2015. Growth rebounded from a brief 1.6% contraction in the third quarter of 2016 to 5.8% during the first three quarters of 2017, largely due to rising commodity prices.
The May 2015 agreement with Rio Tinto to restart the OT mine and the subsequent $4.4 billion finance package signing in December 2015 stemmed the loss of investor confidence. The current government has made restoring investor trust and reviving the economy its top priority, but has failed to invigorate the economy in the face of the large drop-off in foreign direct investment, mounting external debt, and a sizeable budget deficit. Mongolia secured a $5.5 billion financial assistance package from the IMF and a host of international creditors in May 2017, which is expected to improve Mongolia’s long-term fiscal and economic stability as long as Ulaanbaatar can advance the agreement’s difficult contingent reforms, such as consolidating the government’s off-balance sheet liabilities and rehabilitating the Mongolian banking sector.