Economic external environment
In 2005, miscellaneous, especially natural disasters ( Catherine typhoon occurred in littoral areas of USA and some parts of Mexico and tornado in South Eastern Asian countries) and high price fluctuation of some products and goods in the world market affected in the world economy, mostly.
For instance: Catherine typhoon, occurred in littoral areas of the USA, has ravaged main outlets of oil extraction industries: therefore, this influenced to increase petroleum price, sharply. One of the reasons of increase on petroleum and mineral prices at the world market is caused Chinese demands and needs that have been increasing rapidly.
Economic growth of the USA and China, influencing to the world economic growth certainly, have been declined, presently. However, it has still influenced highly. As for China, economic growth has increased by 9.0 percent, decreased by 0.5 percent compared with the executed plan of 2005.
In addition, economic growth has been decreasing in some Asian countries because of natural disasters and price fluctuation on products and goods. Demands of various mineral resource and raw material such as copper, iron, coal, cement, zinc and aluminum etc have been increasing because of Chinese economic growth, investment overage or high growth of disassociated industries, sharply.
For instance: Too many buildings industries and factories are built under the auspice of foreign direct investment of 50-60 billion US dollars every year.
Copper Demand and needs outdistance its supply by 165.000 tones of copper according to the International Center of Copper Study.
As a result, concentrated copper price is getting to be higher at the world market. Copper demand is being increased not only. in Russia and China, our main 2 borders, but also in India.The high rate demands of China and Russia influence on metal price increase at the world market; therefore, it effect to increase of Mongolian external Trade environment. It’s noted between 2004 and 2005 clearly.
Russian Economic growth reached at about 7, 3-7,1 percent between 2003 and 2004. It decreased by 1,8 percent at the end of 2005, and reached at 5,3 percent in 2006. Decrease of petroleum and metal mining and weakening of trade turnover etc influenced it decrease economic growth. In 2005, price on apart met and service increased, which of foodstuff increased by approximately 12-14 percent, service-by 14-15 percent because of other reasons.
In 2005, the inflation will be reached at 12,0 percent. The decrease on oil mining sector in Russia is related to some bigger mining companies, such as UCOS and its activities, and higher taxation rate on petroleum industry; therefore, it influences in Mongolian economic condition especially high price increase.
In conclusion, natural disasters, progressive development of some countries such as China and decrease of Russia oil mining, which is considered the world’s second largest country with oil, influence on the country’s petroleum price increase; therefore, it influences on price increase of Mongolian domestic economy, in one hand. On the other hand, Chinese economic growth, and investment increase can influence on metal price increase, therefore, it affected to improve our external trade environ met and condition and budget balance.
Entry filed under: Economic external environment.