World Bank, Washington - Economic growth in Mongolia accelerated in 2004 and 2005 (up from
5.6 percent in 2003 to 10.6 percent in 2004 and an estimated 6.2
percent in 2005), thanks to sustained favorable weather conditions,
higher commodity prices in the world market, especially those for gold
and copper, greater capital inflows and expansion in the livestock,
transportation and telecommunications sectors.
Foreign
direct investment (FDI) continued, particularly into the banking,
mining, and textile sectors (estimated to be US$93 million in 2004 and
US$110 million in 2005).
A recovery in the
agricultural sector and continued robust growth in the mining and
service sectors also helped. Meanwhile, the processing industry was
stagnant and the manufacturing sector was very seriously affected by
the expiration of the Agreement on Textiles and Clothing
at the beginning of 2005 that led to closures of textile and garment
firms and relocation of their activities to China. Textile industry
value added decreased by 41 percent in 2005.
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