In 2009-2012 Mongolian economy has been affected by the global financial crisis started in 2008, European sovereign bond crisis, and zud in 2009-2010. We witnessed the biggest economic downturn since 1992.
GDP was nominally doubled for the past 4 years, mining sector accounting annual rate of 6.4%, and other sectors 9.2% respectively. The GDP per person was also doubled to an estimate of 3611.5 USD.
Foreign Trade volume has increased 2.8 times from 4 billion USD in 2009 to 11.1 billion USD in 2012. However, the trade deficit has also increased from 0.25 billion USD to o2.35 billion USD. Between the years, the export has increased 2.3 times, and import has increased 3.1 times. The most significant increase occurred in 2011 from previous year of 2010. From 2010 to 2011 the export has been increased by 65.6%, import by 106.2%. The increase in coal export was 6.2 times, iron ore 6 times, copper concentrate 1.7 times, and non-processed crude oil 2.9 times. The main factor in import increase was caused by the equipments in mining and oil projects such as Oyu Tolgoi. However, processed and non-processed gold export was decreased by 60.4%.
Foreign Direct Investment:
FDI of 10.94 billion USD was made in 2009-2012 to the country. 4.7 billion USD was invested alone in 2011, mining sector accounting for the majority, 4 billion USD.
National CPI was increased by 14 %, and 14.2% in the capital Ulaanbaatar. The main pushers were increase in meat price, and tax increase in alcoholic drinks. Tax for tobacco products was increased by 54.6%. The price increases in alcoholic drinks and tobacco is 54.6%, beverages 19.9%, hotels and restaurants 21.8%, educational service 16.2% which is are the biggest increases in 2011. However, telecommunications and postal services prices were decreased by 1.2%.
Employment, unemployment and poverty:
The compliment between economic development and population growth in the country resulted positive effects and changes on work force demand and jobs. Growth in working age averaged annual rate of 3.5% which is two times greater than the population growth in 2009-2012. This proves the demographic window of the country. Agriculture and husbandry is still the biggest employer accounting 33% of the total employment. Services sector accounts for 15%, logistics and warehouse 7%, processing and production 6%, and construction sector accounts for the 5%. However, the biggest industry – mining accounts for 4% only.
Poverty in the population decreased from 38.7% to 29.8% in 2009-2012. Poverty level is the poverty scope index which shows the population that is living under the poverty line by their consumption. All of the indicators show that poverty is common in the rural areas.
As the end of 2012, there are 14 banks and their 1382 branches operating nationwide. Total saving holders reached 2.1 million, increased by 264 thousand, and borrowers reached to 614.6 thousand, increased by 8.4 thousand. Total resource reached to 10.2 trillion MNT due to infrastructure projects, long-term financing measurements by the government and Bank of Mongolia combined with increase in savings and total money in the banking system.
Net asset in the banking system reached to 11.4 trillion MNT, 24.2% increase from 2011 which is 2.2 trillion MNT. 22.3% of the net asset is cash, 10.3% is short-term investments, 58.6% is outstanding debt receivables, and 8.8% is other assets.
The stock market value is 12.9% of the GDP of the country and has increased 3 times from 2009-2012 to 1.8 billion MNT. Value of 30 companies account for 85.9% of the stock market.
As the end of 2012, there are 18 insurance companies with 213 branches, 2357 insurance representatives, 17 insurance brokers, 9 insurance damage appraiser companies, 18 actuaries, and 2419 license holders operating in the country. The total investment in these companies were 107.6 billion MNT which is a 2.6 times increase from 4 years ago.
State budget 2009-2012:
The total budget income and aid was 2 billion MNT in 2009, and 4.8 billion MNT in 2012. The special requirement of the Sustainable Budget Law was implemented in 2011, registering the budget income by balanced method accumulating 328.4 billion MNT in the budget sustainability fund. The purpose of the fund is to stabilize and decrease the effects of economic cycle and commodity price volatility of the state budget.
The budget policy was based on decreasing the budget expansion from the previous years without affecting the public service effectiveness and quality, and targeting inflation when it is absolutely necessary. The budget was 2.3 billion MNT in 2009, 38.6% of the GDP, and increased to 5.92 billion MNT in 2012.
Source: Ministry of Finance and Ministry of Economic Development of Mongolia