Mongolia’s economic freedom score is 55.7, making its economy the 125th freest in the 2018 Economic Freedom Index by the Heritage Foundation.

Its overall score has increased by 0.9, with improvements in monetary freedom, fiscal health, and judicial effectiveness outweighing declines in the government integrity, labour freedom, and government spending indicators. Mongolia is ranked 27th among 43 countries in the Asia–Pacific region; overall its score is below the regional and world averages.

After the collapse of the Soviet Union in 1991, landlocked Mongolia undertook market reforms and extensively privatized its formerly state-run economy. Foreign direct investments to extract its substantial mineral resources transformed the economy. The current government has tried to restore investor confidence but has failed to invigorate the economy in the face of the large drop-off in FDI, mounting external debt, and a sizeable budget deficit. Weak rule of law and lingering corruption are additional drags on the economy.

Trade is significant for Mongolia’s economy; the combined value of exports and imports equals 98 percent of GDP. The average applied tariff rate is 4.6 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. The financial system has undergone modernization, and the banking sector has become largely stable.

The Heritage Foundation is an American conservative public policy think tank based in Washington, D.C.