Identifying key sectors for diversification in Mongolia: an input–output analysis

Abstract

The Mongolian economy relies heavily on mineral exports, making it highly vulnerable to external demand and price shocks. Economic diversification is essential to reducing this dependency and enhancing resilience. This study aims to identify key sectors in the Mongolian economy and discuss their potential for economic diversification. An input-output analysis was conducted using the input-output table for 2018, employing backward and forward linkages. The findings highlight energy and manufacturing are key sectors due to their strong linkages. Prioritizing investments in manufacturing and energy is crucial, as these sectors positively impact upstream sectors by adding value to mineral and livestock-based commodities, thereby playing a vital role in diversification efforts.