Editing Economy of Mongolia (section)

==Economic history==
[[File:GDP_per_capita_development_of_Mongolia.svg|thumb|Historical development of real GDP per capita in Mongolia]]

===Socialist era===
{{Main|Economy of the People's Republic of Mongolia}}
The rapid political changes of 1990–91 marked the beginning of Mongolia's efforts to develop a [[market economy]], but these efforts have been complicated and disrupted by the dissolution and continuing deterioration of the economy of the former [[Soviet Union]]. Prior to 1991, 80% of Mongolia's trade was with the [[former Soviet Union]], and 15% was with other [[Council for Mutual Economic Assistance]] (CMEA) countries. Mongolia was heavily dependent upon the former Soviet Union for fuel, medicine, and spare parts for its factories and power plants.{{Citation needed|date=May 2021}}

The former Soviet Union served as the primary market for Mongolian industry. In the 1980s, Mongolia's industrial sector became increasingly important. By 1989, it accounted for an estimated 34% of material products, compared to 18% from [[Agriculture in Mongolia|agriculture]]. However, minerals, animals, and animal-derived products still constitute a large proportion of the country's exports. Principal imports included machinery, [[petroleum]], cloth, and building materials.

In the late 1980s, the government began to improve links with non-[[communist]] [[Asia]] and [[Western world|the West]], and [[tourism in Mongolia]] developed. As of 1 January 1991, Mongolia and the former Soviet Union agreed to conduct bilateral trade in [[hard currency]] at world prices.

Despite its external trade difficulties, Mongolia has continued to press ahead with reform. [[Privatization]] of small shops and enterprises has largely been completed in the 1990s, and most prices have been freed. Privatization of large state enterprises has begun. [[Tax reform]]s also have begun, and the barter and official exchange rates were unified in late 1991.

===Transition to a market economy===
Between 1990 and 1993, Mongolia suffered triple-digit [[inflation]], rising [[unemployment]], shortages of basic goods, and food rationing. During that period, economic output contracted by one-third. As market reforms and private enterprise took hold, economic growth began again in 1994–95. Unfortunately, since this growth was fueled in part by over-allocation of bank credit, especially to the remaining state-owned enterprises, economic growth was accompanied by a severe weakening of the banking sector. GDP grew by about 6% in 1995, thanks to largely to a boom in copper prices. Average real economic growth leveled off to about 3.5% in 1996–99 due to the [[Asian financial crisis]], the [[1998 Russian financial crisis]], and worsening commodity prices, especially copper and gold.

Mongolia's [[gross domestic product]] (GDP) growth fell from 3.2% in 1999 to 1.3% in 2000. The decline can be attributed to the loss of 2.4 million livestock in bad weather and natural disasters in 2000. Prospects for development outside the traditional reliance on nomadic, livestock-based agriculture are constrained by Mongolia's landlocked location and lack of basic [[infrastructure]].  Since 1990, more than 1,500 foreign companies from 61 countries have invested{{when|date=July 2012}} a total of $338.3 million in Mongolia. By 2003 private companies made up 70% of Mongolian GDP and 80% of exports.<ref>Montsame News Agency.  ''Mongolia''.  2006, Foreign Service Office of [[Montsame News Agency]], {{ISBN|99929-0-627-8}}, p. 67</ref>

Until recently, there have been a very few restrictions on foreign investments during most of Mongolia's post-socialist period. Consequently, mining industry's contribution to FDI increased to almost 25% in 1999 from zero in 1990.<ref>Enerelt Enkhbold, 2014. "[https://www.academia.edu/29338640/The_Impact_of_SEFILM_on_the_Valuation_of_Mining_Companies The Impact of SEFILM on the Valuation of Mining Companies] {{Webarchive|url=https://web.archive.org/web/20221208180107/https://www.academia.edu/29338640/The_Impact_of_SEFILM_on_the_Valuation_of_Mining_Companies |date=8 December 2022}}". Монголын Нийгэм-Эдийн Засгийн Өнөөгийн Байдал, Тулгамдсан Асуудлууд. Илтгэлүүдийн эмхэтгэл, pp. 240–253</ref>

===Economic development present day===
[[File:Mongolian factory worker with cashmere.jpg|250px|thumb|Mongolian factory worker with cashmere]]
[[File:Market in Ulan Bator (Mongolia).jpg|250px|thumb|Market in Mongolia]]
Mongolia's reliance on trade with China meant that the worldwide financial crisis hit hard,<ref name="February 2009 Quarterly review">{{cite web
| url= http://siteresources.worldbank.org/INTMONGOLIA/Resources/MongoliaQuarterlyFebruary2009English.pdf
| title= Mongolia Quarterly review for February 2009
| publisher= [[World Bank]]
| access-date= 7 April 2010
| archive-date= 14 November 2022
| archive-url= https://web.archive.org/web/20221114155808/http://siteresources.worldbank.org/INTMONGOLIA/Resources/MongoliaQuarterlyFebruary2009English.pdf
| url-status= live
}}</ref> severely stunting the growth of its economy. With the sharp decrease in metal prices, especially copper (down 65% from July 2008-February 2009),<ref name="February 2009 Quarterly review" /> exports of its raw materials withered and by 2009 the [[stock market]] MSE Top-20 registered an all-time low since its dramatic spike in mid-2007.<ref name="Mongolian Stock Exchange">{{cite web
| url=http://www.mse.mn/
| title=Монголын Хөрөнгийн Бирж
| publisher=Mongolian Stock Exchange
| access-date=7 April 2010
| archive-date=27 December 2012
| archive-url=https://web.archive.org/web/20121227115041/http://www.mse.mn/
| url-status=live
}}</ref> Just as the economy started to recover, Mongolia was hit by a [[Zud]] over the winter period of 2009–2010, causing many livestock to perish and thus severely affecting cashmere production which accounts for a further 7% of the country's export revenues.<ref name="February 2009 Quarterly review" />

According to the World Bank and International Monetary Fund estimates, real GDP growth reduced from 8% to 2.7% in 2009, and exports shrunk 26% from $2.5Bn to $1.9Bn before a promisingly steady increase up until 2008.<ref name="February 2009 Quarterly review" /> Because of this, it was projected that between 20,000 and 40,000 fewer Mongolians (0.7% and 1.4% of the population respectively) will be lifted out of [[poverty]], than would have been the case without the global financial crisis.

In late 2009 and the beginning of 2010, however, the market has begun to recover once again. Having identified and learnt from its previous economic instabilities, legislative reform and a tightened fiscal policy promises to guide the country onwards and upwards. In February 2010, foreign assets were recorded at [[USD]]1,569,449 million.<ref name="Bank of Mongolia 2010 February">{{cite web
 |url       = http://www.mongolbank.mn/c/document_library/get_file?uuid=d9f20f03-bff5-4260-9fd6-7e45880c4cd4&groupId=16
 |title     = Bank of Mongolia Monthly Stat Bulletin
 |date      = February 2010
 |publisher = [[Bank of Mongolia]]
}}{{dead link|date=April 2018 |bot=InternetArchiveBot |fix-attempted=yes}}</ref> New trade agreements are being formed and foreign investors are keeping a close eye on the "[[Wolf Economy|Asian Wolf]]".

Mining is the principal industrial activity in Mongolia, making up 30% of all Mongolian industry.<ref>Montsame News Agency.  ''Mongolia''.  2006, Foreign Service Office of [[Montsame News Agency]], {{ISBN|99929-0-627-8}}, p. 82</ref> Another important industry is the production of cashmere.  Mongolia is the world's second largest producer of cashmere, with the main company, Gobi Cashmere, accounting for 21% of world cashmere production as of 2006.<ref>Montsame News Agency.  ''Mongolia''.  2006, Foreign Service Office of [[Montsame News Agency]], {{ISBN|99929-0-627-8}}, p. 86</ref>

Total export in 2019 was US$7.6 billion.<ref>{{cite web | url=https://trendeconomy.com/data/h2/Mongolia/TOTAL | title=Mongolia &#124; Imports and Exports &#124; World &#124; ALL COMMODITIES &#124; Value (US$) and Value Growth, YoY (%) &#124; 2003 - 2019 | date=14 November 2021 | access-date=30 April 2022 | archive-date=9 December 2022 | archive-url=https://web.archive.org/web/20221209024416/https://trendeconomy.com/data/h2/Mongolia/TOTAL | url-status=live}}</ref>

The 2022 economic growth is expected to be one percent and international institutions anticipate the economy to speed up by at least six percent in 2023 from expanded commodity exports.<ref>{{Cite web |last=Adiya |first=Amar |date=2022-06-22 |title=Mongolia's Economy Plunges Amid Border Disruptions and Growing Food Shortages |url=https://www.mongoliaweekly.org/post/mongolia-s-economy-plunges-amid-border-disruptions-and-growing-food-shortages |access-date=2022-09-11 |website=Mongolia Weekly |language=en |archive-date=5 February 2023 |archive-url=https://web.archive.org/web/20230205165902/https://www.mongoliaweekly.org/post/mongolia-s-economy-plunges-amid-border-disruptions-and-growing-food-shortages |url-status=live}}</ref> A significant commodity export boom is expected starting from 2023 with new coal rail networks {{Webarchive|url= |date=11 September 2022}} to China coming online and increased copper production from [[Rio Tinto (corporation)|Rio Tinto]]’s underground mine [[Oyu Tolgoi mine|Oyu Tolgoi]] in southern Mongolia.

In early 2020s, Mongolia's economy, though experiencing growth spurred by natural resource exports, faces challenges. Over-reliance on mining, rising debt, inflation, and potential fuel supply disruptions from Russia pose risks to the country's economic stability despite government efforts in infrastructure and social programs.<ref>{{Cite web |url=https://www.mongoliaweekly.org/post/mongolia-faq |access-date=2024-09-21 |website=www.mongoliaweekly.org |title=Mongolia FAQ |date=21 September 2024 }}</ref>