Mongolia’s economy grew rapidly between 2004 and 2014. This propelled the country into middle-income status by 2011 and allowed it to expand its social welfare programs through large fiscal surpluses and distributed mining income. Social transfers, which accounted for about 40% of the income of poor people, significantly reduced poverty.
Mongolia’s economy is heavily dependent on mining and vulnerable to shocks. It experienced a rapid downturn in 2016 due to the declining commodity prices and decelerating growth in the People’s Republic of China, the country’s neighbor and largest trading partner. These and other factors precipitated a steady decline in gross domestic product growth, from 17.5% in 2011 to only 1% in 2016.
Mongolia is a vast, sparsely populated country located between the People’s Republic of China (PRC) to the south and the Russian Federation to the north. Its western region suffers from a slow pace of development because of remoteness from the country’s political and economic centers and inadequate transport network.
Strong economic growth, driven by years of economic reforms and the country’s vast mineral wealth, supported Mongolia’s rise to middle-income status in 2011. It also bolstered fiscal revenues and allowed the government to strengthen its social welfare programs, which were crucial for inclusive development, as the mining sector that comprised the main driver of growth provided less than 4% of e
Nomadic and rural Mongolia has experienced rapid urbanization since 1950, which accelerated during the transition from central planning to a market-based economy in the early 1990s. A series of harsh winters or dzuds resulted in large numbers of livestock deaths, damaging herders’ livelihoods.