Korea and Mongolia must work to enhance their economic cooperation, especially in the energy and natural resources sector, to help ensure the countries' joint development, a trade promotion agency said Thursday.

In a report, the Korea Trade-Investment Promotion Agency or KOTRA insisted now was the right time for South Korea to boost its investment in the East Asian country as Mongolia is increasingly opening up its energy market in the face of a prolonged slump.

"Mongolia is a high-risk market that has also been struggling with a long economic slump," the report said, adding the country's economy was expected to grow 0.4 percent this year.

Against such a backdrop, the country is going all out to develop its rich resources market, it noted.

"The countries must boost their bilateral cooperation in the energy, natural resources, manufacturing, transportation and infrastructure sectors before anything," the report said.

In 2015, bilateral trade between the two countries came to $300 million, while Korea was Mongolia's third largest trade partner in 2014.

However, Korean investment in Mongolia only accounted for 2.7 percent of the total, according to the report.

"There countries still need to improve their economic compatibility, but there are many areas they can work together for joint development and co-prosperity," it said. (Yonhap)