Officials have revised Mongolia’s economic growth outlook, lowering forecasts due to weak exports and tighter government spending.However, the economy remains resilient, supported by livestock recovery and mining expansion. This reflects the country’s ongoing challenge to balance resource dependence with long-term development. According to the latest economic projections, analysts now expect Mongolia’s gross domestic product to grow by 5.7 percent in 2025.. That is a decrease from earlier estimates of 6.6 percent. Analysts project the same 5.7 percent growth rate for 2026, slightly down from the previous forecast of 5.9 percent.
This downward adjustment reflects several changing dynamics. Coal exports are declining due to reduced steel production in China, Mongolia’s largest trading partner.In addition, recent fiscal tightening will dampen domestic consumption and public investment.Nonetheless, economic growth remained solid during the first half of 2025. Favorable weather helped livestock numbers rebound, contributing to gains in agriculture. Meanwhile, non-mining sectors such as construction and energy showed notable expansion.
However, mining performance was mixed. Although the underground phase of the Oyu Tolgoi copper-gold mine ramped up, coal shipments slowed due to weakening demand. Looking ahead, services and non-mining industries will drive growth through 2026. Despite these gains, inflation continues to exceed targets. Analysts forecast consumer prices will rise 8.6 percent in 2025.While this is slightly lower than earlier estimates, it remains well above the central bank’s target range. Increases in food prices and imported goods continue to push inflation higher.
By 2026, inflation is expected to moderate to around 7.2 percent. This easing reflects a delay in utility tariff hikes and updated weightings in the consumer price index. Nevertheless, price pressures may persist if global supply disruptions return. The outlook faces several risks. A harsher-than-usual winter could harm agriculture and livestock recovery. Further restrictions on China’s steel output may hurt demand for Mongolian coal. Moreover, delays in mine development could reduce expected revenues.
Officials emphasize the need to diversify the economy beyond mining. Expanding non-resource sectors and managing fiscal risks are now top policy priorities. By promoting structural reforms, Mongolia aims to reduce vulnerability to commodity shocks. “Economic growth remains strong despite global uncertainty,” one senior official noted. “Now is the time to build resilience and invest in diversification.”
As Mongolia moves forward, the government is expected to focus on social protection, climate resilience, and infrastructure. Strategic planning will be critical to maintain momentum while mitigating external and internal pressures. Although near-term challenges remain, Mongolia’s economic growth story continues to evolve—driven by recovery, reform, and rising regional ambition.
