ULAANBAATAR Feb 16 (Reuters) - Mongolia's economy grew 2.3 percent in 2015, said the National Statistical Office on Tuesday, making it the weakest year since the country suffered delayed effects from the global economic crisis in 2009.
Mongolia's economy has fallen being from the fastest growing in the world in 2011 and 2012 -- 17.5 percent and 12.3 percent, respectively -- due to a lack of investors investing in the resource-rich country and slowed growth in its top trading partner and neighbour, China.
The stagnant economy sets a daunting challenge for the Democratic Party members, who will be fighting to retain control on the government at an election due on June 29.
The growth figure was in line with projections from the World Bank and Asian Development Bank. The International Monetary Fund had projected growth of 4.4 percent.
Nick Cousyn, chief operating officer for Ulaanbaatar-based brokerage BDSec, said the slowdown stems from a combination of falling foreign investment, dwindling commodities prices and repeated delays to launching and completing development projects.
The government has put off further development of its Tavan Tolgoi coal mine since commercial operations launched in 2011, as well a railway that would deliver coal from the mine to China.
"Coal is probably the biggest culprit, and the government's inability to develop the Tavan Tolgoi deposit and the transportation," Cousyn said, adding that shipping by rail was cheaper than by truck, which would cut costs and make its coal more competitive.
Mongolia's two largest export products are copper and coal.
Growth in the country began to falter when a law passed just before the last parliamentary election, in July 2012, made it hard for foreigners to invest in mining.
China, which saw growth fall to its slowest in a quarter decade last year, is also buying up less coal than three years ago, especially for the thermal coal used to power power plants.
Mines in Mongolia also produce coking coal, a key ingredient for steelmaking. Coal exports were down 35 percent in 2015 from the year before.
Cousyn said growth may return to above 10 percent, "but treadline growth for Mongolia in a normal or optimistic commodities environment is in the 7-9 percent range".
The economy's slowdown will likely be a chief point of attack for the opposition Mongolian People's Party, Cousyn added.
"For the Democratic Party to maintain their majority, they're going to have to provide voters with a vision and a plan for future growth," he said.