Prospects for Mongolian growth. With ample mineral reserves and increasing demand for resource globally, Mongolia will experience rapid economic growth in the next decades. The relative stable and democratic political system dramatically reduces the poli

Authors Avatar

MONGOLIA, NEXT COUNTRY WORTH TO INVEST IN NEXT DECADE

As a lower middle income developing country, Mongolia ha has not shown its growth potential until last decade. Investment in Mongolia now becomes a rational choice for the rapid economy growth and stable democratic political system. Discovering one of the world’s largest coal fields and other important minerals, Mongolian economy has been stimulated by the dramatically increasing demand of global energy especially be new developing counties. Moreover, economy will be accelerated by the high literacy rate of Mongolian and considerably attention on education and environment.  

Locating in the northeastern Asia between Russia and China, economy of Mongolia has been relying on exporting agriculture for a long period, which fluctuated with the seasonal weather. Currently, Mongolia has experienced the growing opportunity brought by its minerals reserve, which its real GDP growth continuously over 8% expects for 2009 and 2010. With the new project of exploit the Tavan Tolgoi mine, approximately 6.4 billion tonnes of coal  reserve will bring Mongolia 11.9 and 14.8% expected growth in 2011and 2012* with other mining project like copper, gold and rare earth. Mainly focus on the mining industry, Mongolia has shared large portion of the benefit from the rapidly development from Asia countries, especially steel industry from China and India. Though the commodity price has been volatile recently, the substantial customer and trading partner will provide Mongolia impressive profit from its reserve. As a result of rapidly growth of real GDP, the government current account balance has been improved from -4.6% of GDP in 2009 to expected 6.5% in 2011 and increased foreign exchange reserve to 2.288 billion in 2010*.

Join now!

During 2011, the inflation and exchange rate has hiked to 10.6%* and 1,125Tg/$. That fact has warned bank of Mongolia to fight against the inflation and currency appreciation pressure. Basically the inflation is caused by the increasing fixed investment like real estate industry and food price, increasing the overnight to 11.5%* and exceeding economy growth will ease the inflation rate and appreciation pressure. The Ulan Bator stock exchange in Mongolia also has traded actively, which the index have risen 27%* during 2011 and further rise to 10 billion dollar in 2015 from 1billion now ^.        

To attract foreign investment, the stable ...

This is a preview of the whole essay