The Mongolian economy is experiencingrapid growth in 2011 the second quarter saw the economygrowing at a whopping 17.3 percent year on year, compared to9.9 percent in the first quarter. Transportation andconstruction grew at 39.9 percent and 38.4 percent,respectively, while retail and wholesale trade grew at 24.7percent, with Mongolians spending more on consumption as aresult of higher incomes. The mining and manufacturingsectors recorded respectable growth rates of 8.3 and 12.9percent yoy in the second quarter, respectively. Reflectingthe higher growth, unemployment declined from 13 percent inDecember 2010 to 8.7 percent in June. Informal labor marketsfor unskilled workers are also booming, with real wagesnearly doubling between December 2010 and June 2011.Mongolia's economic outlook depends heavily on globalmacroeconomic factors: the current uncertainty and poorgrowth prospects for the global economy are cause forconcern. If there is another global recession,Mongolia's small, open economy will be affected. Inthat case, China's policy reaction will be crucial for Mongolia.
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