30.05.2026
Mongolia’s economy remained resilient in 2025, supported by mining, agriculture, construction and services. Growth is expected to moderate in 2026–2027 as the exceptionally strong post-pandemic and commodity-driven momentum fades, coal exports normalise and domestic demand cools. Copper production, especially from Oyu Tolgoi, should remain a major medium-term growth driver, while agriculture is recovering after the severe dzud shock. Inflation has eased but remains vulnerable to food prices, public spending, wage growth and exchange-rate pressures. Fiscal and external balances remain highly exposed to commodity prices, especially coal and copper, and to demand from China.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 6.3 | 5.0 | 6.0 |
| Inflation (%, yoy) | 7.2 | 7.1 | 6.5 |
| Employment rate (% of working-age population, 15+) | 55.8 | 56.0 | 56.2 |
| Fiscal balance (% of GDP) | -2.3 | -2.8 | -2.5 |
| Gross public debt (% of GDP) | 44.0 | 45.5 | 46.0 |
| Current account balance (% of GDP) | -8.0 | -7.0 | -6.5 |
Growth moderates but remains solid
Mongolia’s real GDP growth is estimated at around 6.3% in 2025, supported by mining, agriculture, construction and services. Copper production increased as underground output from Oyu Tolgoi expanded, while agriculture began to recover after the severe dzud-related losses in livestock. Domestic demand remained strong, supported by public spending, wages and credit growth.
Growth is projected to moderate to around 5.0% in 2026 before strengthening again in 2027. The 2026 slowdown reflects normalisation after strong 2025 performance, weaker coal export momentum and softer domestic demand. In 2027, growth should benefit from higher copper production, continued mining investment and a more stable agricultural sector.
Mining remains the main growth engine
Mining will remain central to Mongolia’s outlook. Copper output is expected to become increasingly important as Oyu Tolgoi underground production rises, helping offset weaker coal-export growth. Coal exports remain highly dependent on Chinese demand, border logistics and commodity prices.
This concentration creates important vulnerabilities. A slowdown in China, lower coal or copper prices, transport disruptions or delays in mining investment would quickly affect exports, fiscal revenue and growth. Diversifying beyond mining remains essential, but progress is gradual.
Inflation eases but risks remain
Inflation eased in early 2026, moving closer to the Bank of Mongolia’s target range. Lower non-food and services inflation helped reduce price pressures, although food prices remained an important source of inflation. The central bank kept policy cautious and used macroprudential tools to contain credit risks.
Inflation is expected to remain around 7% in 2026 before easing further in 2027. Upside risks come from public-sector wage increases, large government projects, food prices, energy costs, exchange-rate movements and strong domestic demand. Weather shocks can also quickly affect food supply and prices.
Fiscal risks rise as spending pressures increase
Mongolia’s fiscal position remains exposed to commodity cycles. Strong mining revenues have supported public finances in recent years, but spending pressures remain high, including wages, social transfers, investment projects and infrastructure commitments. The fiscal balance is expected to remain in deficit in 2025–2027.
Public debt is moderate but projected to rise gradually. The main fiscal risk is not only the debt level, but the volatility of revenues and spending discipline during commodity upswings. Stronger fiscal rules, saving part of mineral revenues and better public investment management will be important for reducing procyclicality.
External position remains vulnerable to commodity cycles
The current account deficit remains sizeable, reflecting high import demand, investment-related imports and dependence on commodity exports. Strong copper exports should help narrow the deficit gradually in 2026–2027, but the external position remains vulnerable to coal prices, copper prices and Chinese demand.
Foreign direct investment in mining helps finance external needs, but also increases future income outflows. Maintaining adequate reserves and exchange-rate flexibility will be important, especially if commodity prices weaken or global financing conditions tighten.
Overall outlook
Mongolia’s outlook remains positive, but growth is expected to become more moderate and more dependent on copper production. Inflation should gradually ease, although food prices and fiscal expansion remain risks. The main policy challenge is to manage commodity revenues prudently while supporting diversification, infrastructure, climate resilience and private-sector development. Sustained growth will depend on reducing dependence on coal, improving fiscal discipline, strengthening financial-sector oversight and making better use of mining revenues for long-term productivity.
Sources:
World Bank, Mongolia Macro Poverty Outlook, April 2026.
World Bank, Mongolia Economic Update, April 2026.
International Monetary Fund, World Economic Outlook, April 2026.
Asian Development Bank, Asian Development Outlook, April 2026: Mongolia.
Bank of Mongolia, Monetary Policy Committee Statement, March 2026.
European Bank for Reconstruction and Development, Regional Economic Prospects, February 2026.
