Blue Sky Is the Limit. Mongolia’s GDP Surge 14.3% in First Half of 2011

Date: 
12 Aug 2011

Blue Sky Is the Limit
Mongolia’s GDP Surge 14.3% in First Half of 2011

Record GDP Growth. The National Statistics Office of Mongolia data released yesterday reveals that the Mongolian economy had its best first half of the year in a decade. The economy registered breakneck GDP growth rate of 14.3% year-on-year (y-o-y) in 1H2011. In nominal terms GDP growth rate stood at incredible 29.1% y-o-y. Furthermore, 2Q2011 with 17.3% y-o-y real growth was the fastest quarter since 2005. In 1H2011 industry and construction expanded 10.1% y-o-y in real terms, services grew 16.2% y-o-y and net taxes on products increased 27.1% y-o-y. Relative laggard agriculture still registered solid 6.0% y-o-y growth. 

Strong mining sector output fueling GDP growth. Industrial production contributed 19.4% to GDP growth. Mining sector output, the largest component (58.2%) in industrial output advanced 12.4% y-o-y. Coal mining surged 39.4%. Share of coal production in mining output increased to 25% in 1H2011 from 20% in the previous period. Iron ore output jumped 279.1% y-o-y.

Surging investments and revenues support increased expenditures. Mongolia remains an attractive destination for foreign investors. Favorable commodity prices, abundance of opportunities in resource sector and improving business environment brought record high FDI of US$1.44bn, up 127% y-o-y in 1H2011, according to the Bank of Mongolia data.

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