Mongolia Economic Structure

 

 

Mongolia has a market economy, which it started developing in 1990-1991. Mongolia’s agricultural and service sectors complement the country’s industry sector, which remains underexploited.[br] 

Mongolia Economic Structure

Traditionally, Mongolia’s economy was based on animal husbandry. Although industry accounts for 29.5% of the GDP, the sector employs just 5% of the workforce. Although the country is rich in mineral resources such as coal, copper, gold, molybdenum, tin, tungsten and fluorspar, the industry sector’s contribution to the GDP is the least. This is because most of the mineral resources remain unexploited, allowing substantial growth in this sector in the forthcoming years.

 

As far as Mongolia’s internal economic structuring is concerned, services still lead the way when it comes to contribution to the GDP. Here is how the break up looks like:

• Agriculture: 21.2%

• Industry: 29.5%

• Services: 49.3% (2009)

 

The large trade and services sector includes a well-established tourism industry, big-game hunting services for foreigners and site services for filmmakers.

 

In terms of labor force employed, following was the proportion for the sectors in 2008:

• Agriculture: 34%

• Industry: 5%

• Services: 61%

 

The mining and livestock sectors, primarily the export of commodities such as gold, copper, and cashmere, form the backbone of Mongolia’s real GDP growth.

 

In 2007, Mongolia’s GDP growth was at 9.9 %, which represented a good move from 8.6% in 2006. The economic growth in that year was primarily driven by

• Agriculture – It contributed 3.4 percentage points to economic growth

• Services – It contributed 4.3 percentage points

 

While most Foreign Direct Investment (FDI) coming into Mongolia continues to go into mining, its value-add grew by only 1.7% in 2007.

 

The services sector continues to show a strong growth, driven in particular by transports and trade (2.1 and 1.3 points of economic growth respectively).[br]

Mongolia Economic Structure: Income Trends

Mongolia has a relatively low standard of living with an estimated GDP per capita of $3,400 in 2009. An estimated 33% of the country’s population lives below the poverty line.