Economy grows 6.3 percent as service sector increases www.zgm.mn
As of first nine months of 2019, Mongolia’s GDP at 2010 constant price increased 6.5 percent, to MNT 13.7 trillion, according to the National Statistical Office (NSO). This was mainly due to increases in the service sector which accounted for 2.9 percentage points or 40 percent of the growth.
The mining sector growth made about 1.5 percentage points or 24 percent of the GDP rise. Service sector includes trade, transportation, and communication sectors, which depend on the mining sector, showing that Mongolia’s economy is still encouraged by the growth in mining. In terms of the largest mining companies’ performance, Erdenes Tavan Tolgoi JSC exported 12.6 million tons of coal in the first 10 months and Energy Resource LLC 4.2 million tons of coal. Coal exports have reached 32.3 million tons, a 5 percent increase from the same period of last year.Thus, 524 national companies have supplied their products and services to Oyu Tolgoi (OT) LLC during the reporting period. OT spent USD 329 million on national procurement and the construction of Shaft 2 at the Oyu Tolgoi mine has been declared complete.The World Bank highlighted in its report in October, “In Mongolia, growth momentum has continued in the first half of 2019, as GDP rose to 7.3 percent from 6.8 percent in 2018. This robust performance has largely been supported by a strong coal sector and increased private investment. However, the report cautions of the risks including political uncertainty, commodity price shocks, cross border bottlenecks, implementation delay mega projects and slower implementation of banking sector reforms.”In addition to the main economic indicators, inflation has also declined. Consumer price index (CPI) at the national level, which increased 9 percent in September, rose 7.6 percent in October. In October 2019, a 5.1 percent increase in CPI from the end of the previous year was mainly due to increases in prices for meat and meat products by 27.4 percent and clothing, cloth and footwear for each group by 5.4 percent and alcoholic beverages, tobacco group by 2.7 percent, respectively.Meat prices have risen by 30 percent year on year, but have dropped by about 4 percent in October, compared to the previous month. However, the inflation rate in Ulaanbaatar is 8.5 percent, which exceeds the Bank of Mongolia (BoM)’s target.
Published Date:2019-11-18