Direct Cooperation to Be Established with Major Global Tech Companies www.montsame.mn

The Cabinet Secretariat of the Government of Mongolia and the Communications Regulatory Committee co-organized a discussion titled “Social Media Regulation: Present Situation and Future Trends” on April 24.

The meeting brought together more than 80 representatives from 24 organizations such as the National Security Council, National Human Rights Commission, General Police Department. Participants discussed ways to improve cooperation and increase accountability of social media platforms.

During the meeting, the participants spoke about the current situation in the digital environment and key challenges. They noted that the number of internet users continues to grow, with Facebook becoming a major channel for social interaction. However, this has also led to rising negative impacts, such as the spread of contents that violate children’s rights, an increase in online fraud and cybercrime, and the spread of false information and defamation.

The Ministry of Digital Development, Innovation and Communications and the Ministry of Education introduced a draft law to regulate children’s participation on social media. The participants emphasized the need to develop the legal framework in line with international practices, including those of the UK, S.Korea, Japan, Malaysia, Kazakhstan, and Indonesia.

The General Police Department and the Communications Regulatory Commission also presented statistics on cybercrime and pointed out challenges in exchanging information with foreign platform companies. They stressed that regulating the digital environment requires coordinated efforts among government agencies.

At the end of the discussion, they agreed on the need to establish direct cooperation with major global technology companies such as Meta, Google, and TikTok. In addition, the participants discussed creating legal conditions to allow these companies to have local representatives in Mongolia and to strengthen inter-agency coordination. 

‘EU Day 2026’ to Be Held in Local Area for the First Time www.montsame.mn

 Prime Minister Uchral Nyam-Osor received the Ambassador of the European Union to Mongolia, Ina Marciulionyte, on April 28.

During the meeting, the two sides discussed the current situation of cooperation between Mongolia and the EU, projects and programs, investment opportunities, and issues requiring further attention. Prime Minister Uchral noted that expanding and developing relations with EU member countries is one of the priorities in Mongolia’s foreign policy, and introduced policies and actions implemented by the government aimed at increasing foreign investment and fostering a favorable investment environment. He also highlighted that within the framework of the “Chuluulye” (Liberate) initiative, the government is working to boost the economy and support business environments.

The Prime Minister noted that economic and business relations between Mongolia and the EU have been actively expanding in recent years, highlighting the 2025 EU-Mongolia Business and Investment Forum and the 2026 Investors’ Roundtable Meeting. He further emphasized that the signing of a EUR 1 billion Memorandum of Understanding between the government of Mongolia and the European Investment Bank was an important step forward in bilateral investment cooperation.

He also highlighted that President Khurelsukh Ukhnaa has invited a high-level representative of the European Union to attend the 17th Conference of the Parties on Climate Change (COP-17), and noted that the conference will serve as an important platform for expanding investment cooperation in the green development sector.

The European Union Ambassador, Ina Marciulionyte, expressed strong interest from European countries in investing in Mongolia, particularly in expanding cooperation in the renewable energy sector. She also mentioned that the “European Day 2026” will take place in Darkhan-Uul aimag on the May 23, emphasizing that the event will be held in a local area for the first time this year.

The parties exchanged views on deepening cooperation in areas such as environmental protection, local development, and public-private partnerships.

China begins construction of 4 GW renewable transmission project in Inner Mongolia www.alcircle.com

Construction of a 4-million-kilowatt new energy transmission project began on April 15 in Jungar Banner, located in Ordos, North China’s Inner Mongolia autonomous region, according to State Grid East Inner Mongolia Electric Power Co.

The project is part of the Mengxi–Tianjin South ultra-high voltage (UHV) transmission corridor. It will run from the 500-kV Dalu Substation to the 500-kV Buertao Substation, and further connect to the 1,000-kV Ordos UHV Substation.

The development includes two new 500-kV substations at Dalu and Buertao, along with 279 kilometres of transmission lines and 340 towers. The total investment for the project is RMB 1.94 billion (around USD 283 million).

Once completed, the project will strengthen the transmission of renewable energy from Ordos to the Beijing–Tianjin–Hebei region. It is expected to deliver around 14 billion kilowatt-hours of electricity annually, helping meet rising power demand.

The project is also expected to meet environmental goals by reducing carbon dioxide emissions by approximately 4.4 million tonnes per year.

Buryatia wants to import 5,000 tons of meat and frozen bull semen from Mongolia www.open.kg

On April 27, the Minister of Food, Agriculture, and Light Industry, Iderbat Tsagaanhuu, held a meeting with the Deputy Prime Minister and Minister of Food and Agriculture of the Republic of Buryatia, Amgalan Darmaev. During the discussion, Iderbat noted that Mongolia has joined the Temporary Agreement on Free Trade of the Eurasian Economic Union (EAEU) for the first time. Under this agreement, 90% of the 367 goods that are exempt from duties consist of agricultural products. He emphasized the importance of ensuring that exported goods meet standards, which will help stimulate trade between Mongolia and Russia. In particular, the minister pointed out the need to address issues related to veterinary medicine and quarantine for the successful export of meat and meat products from Mongolia to Russia.

The Minister of Food and Agriculture of Buryatia, Amgalan Darmaev, noted that under the Temporary Agreement on Free Trade of the EAEU, there is an opportunity to increase meat exports from Mongolia to the Republic of Buryatia to 5000 tons. In particular, the Buryat company "Myasprom" expressed its readiness to purchase 2000 tons of beef and 1000 tons of horse meat. Amgalan Darmaev also expressed the intention to develop cooperation with Mongolia in the field of animal husbandry, breeding, and the supply of meat and meat products, including the purchase of frozen bull sperm and the import of large volumes of horse meat.

Real wage growth lags behind nominal gains www.ubpost.mn

Wage growth has significantly outpaced inflation in nominal terms over the past decade, but real income gains remain modest, underscoring structural challenges in the labor market, according to a new study by the Ministry of Family and Human Development. The report found that wages increased by 143 percent in nominal terms over the last 10 years, yet rose by only 23 percent in real terms, highlighting the impact of inflation and productivity gaps on household income.

The study also outlined the scale of workforce expansion needed to sustain long-term economic growth. To maintain an average growth rate of 7.2 percent and meet the country’s “Vision-2050” development targets, total employment will need to exceed 1.8 million by 2035.

Labor demand is expected to be highest in the construction and manufacturing sectors. Compared to 2024 levels, the economy will require an additional 88,100 workers in construction and 69,800 in manufacturing by 2035, reflecting ongoing industrialization and infrastructure development. At the same time, the report highlighted persistently low labor force participation, particularly among young people aged 15 to 24 and women. It called for targeted policies and programs to improve access to employment, skills training, and career opportunities for these groups.

Addressing gender disparities in the labor market could also deliver significant economic benefits. A study by the World Bank estimates that reducing the gender gap in workforce participation could increase GDP per capita by up to 20 percent. The Ministry emphasized that aligning wage growth with productivity improvements will be critical to reversing the decline in labor force participation and ensuring sustainable economic expansion.

Lower the pressure instead of closing business accounts! www.ubpost.mn

The old Mongolian proverb rings true across generations: “Busy hands bring wealth”. Unfortunately, for a growing number of business owners across the country, this wisdom has curdled into bitter irony. They toil, they strive, they put in the hours, and still find themselves sinking deeper into financial quicksand. At the heart of their plight lies a punishing cycle that has ensnared companies nationwide. When businesses fall behind on tax and social insurance obligations, government authorities respond by freezing their bank accounts and seizing their assets. Revenue continues to trickle in, but owners cannot touch a single tugrug. They watch helplessly as their operational lifeline runs dry, unable to pay wages, settle debts, or even chip away at the very obligations that triggered the freeze in the first place. It is, by any measure, a catch-22 of staggering proportions.

What follows the freeze is perhaps more troubling still. Businesses describe receiving calls from tax and social insurance officials who, rather than offering a path forward, engage in what amounts to backdoor bargaining. “When and how much will you pay?” the officials reportedly ask. “Give us a clear commitment, and we’ll unfreeze your account.” For entrepreneurs already stretched to breaking point, these conversations feel less like problem-solving and more like having a boot pressed firmly on their throat. Few stories illustrate this predicament more starkly than that of LKG Engineering, a construction firm that has weathered 16 years in one of the country’s most volatile industries. Today, it teeters on the edge of collapse. 

“We are staring down the barrel of bankruptcy,” confessed a company representative, speaking with a weariness that comes from fighting a losing battle. The numbers tell a grim tale: over 200 million MNT owed in social insurance contributions and another 310 million MNT in value-added tax arrears. LKG Engineering is no faceless corporation, it is a family affair, founded by brothers and staffed by relatives who once believed that honest work would see them through. That faith has been tested to its limits. The representative laid bare the arithmetic that has bled the company dry. Social insurance alone claims 24 percent of earnings, or 12.5 percent from the employer’s pocket, 11.5 percent withheld from workers. Layer on personal income tax and value-added tax, and a staggering 44 percent of every tugrug earned vanishes into government coffers before the company sees a cent of profit. “One in every four MNT we make goes straight to contributions. Add the rest, and nearly half our revenue disappears before we can reinvest a single coin,” the representative noted. 

The crushing tax burden might have been manageable in better times. But Mongolia’s construction sector has seen better times come and go. A speculative bubble inflated property prices beyond what ordinary buyers could stomach, and now the market has gone cold. Across Ulaanbaatar, apartment blocks stand half-empty, monuments to overconfidence and miscalculation. With sales drying up, cash flow has become a trickle. Subcontractors wait months for payment. Workers’ wages arrive late, if they arrive at all. When forced to choose between paying staff and paying the taxman, most owners opt to keep their people fed. The debt to the state compounds, interest accrues, and eventually the dreaded freeze arrives.

Moreover, in Bayangol District, small business owners are feeling the pinch of rising costs and heavy tax burdens. For many, staying afloat has become a daily struggle. In particular, D.Otgonbayar, who runs a landscaping and service company, employs about 50 to 60 seasonal workers. He admits that while their daily pay ranges between 80,000 and 100,000 MNT, most are hired on a temporary or contract basis and remain unfamiliar with how to declare or pay taxes. “When we tell them to set aside 10,000 MNT from their daily wages for taxes, many get upset. They also refuse to pay social insurance at the minimum rate. To keep them from quitting, we’ve been paying full wages without deductions. Now we’re 98 million MNT in debt, and 65 million MNT of that is for social insurance, and our account has been frozen,” D.Otgonbayar explained. He accepts part of the blame for this debt, saying the root of the problem lies in the system itself. “Both employers and employees shy away from paying because the tax rates are simply too high. People don’t see any benefit from their contributions. Many feel the government services are poor and the quality of life gets worse every day while the gap between rich and poor keeps widening,” he said. 

J.Tuvshin, who manages a small furniture factory in the same district, also tells a similar story. “We’re neck-deep in debt to the tax office, the social insurance fund, and even non-bank lenders. It’s barely manageable,” he said. His company employs 10 people, each earning about 3 million MNT a month. “Our monthly payroll comes to 30 million MNT, but over 10 million MNT of that goes straight to taxes and social insurance. When we don’t have enough cash flow, we end up postponing tax payments just to cover salaries. Skyrocketing prices for raw materials and transportation have further eaten into profits. Taxes are calculated on sales, not net profit, which makes things even harder. On top of that, we still have to pay VAT. To stay competitive, we tried offering customers the option to buy furniture with or without VAT. The tax authorities ordered us to include VAT in all sales and warned of penalties for any violations. At this point, running a small or medium-sized enterprise in Mongolia feels impossible,” J.Tuvshin shared. 

‘Account closure may be required again under the law’  

Across the country, small and medium-sized enterprises remain the lifeblood of the economy but for many, surviving under mounting tax debts and frozen accounts has become a daunting challenge. Ask any small business owner in the service sector, and their story is likely to echo the same refrain, such as unpaid taxes, overdue social insurance contributions and bank accounts locked by the authorities. The question that now hangs in the air is how to break this vicious cycle, how to ensure that businesses can meet their obligations while continuing to operate without being suffocated by debt.

An official from the Mongolian Tax Authority’s Public Relations Center explained that tax inspectors are legally empowered to freeze a company’s accounts, seize assets and demand settlement of outstanding taxes. “If the debts and payments are cleared, those measures are lifted. However, following an order from the Prime Minister earlier this month, the accounts of 12,153 enterprises were unfrozen for a period of one to two months to allow them to pay off their debts. These companies owed a collective 3.7 trillion MNT. Between April 7 and 21, 1,578 of them have already paid 43.6 billion MNT in tax. If they fail to meet their obligations within the given period, their accounts will be closed again. That’s the law,” the official said. 

According to official data, Mongolia has around 265,000 registered enterprises, but only about 117,000 are currently active, or roughly 40 percent. By the end of 2025, some 16,000 companies had their accounts sealed due to unpaid taxes. On April 7, under the Prime Minister’s directive, bank accounts of more than 12,000 tax-indebted firms and an additional 6,000 with overdue social insurance payments were reopened temporarily. Collectively, they owe about 3.7 trillion MNT to the tax authority and several trillion more to the social insurance fund. In short, only one in two registered businesses is still operating, and nearly one in 10 remains trapped in debt. The Government’s recent measure to reopen these accounts has offered a brief window of relief and a chance for recovery, which is part of a broader effort under the “Liberate” initiative to ease bureaucratic hurdles and support struggling enterprises. Whether this breathing space will be enough to bring lasting stability to the small business sector remains to be seen. For now, owners can only hope that this reprieve marks the first step toward genuine economic revival rather than just a temporary pause before the next wave of hardship.

No tax amnesty 

For many small and medium-sized businesses, the weight of taxes has become unbearable. Owners across industries say they are being brought to their knees by rising VAT and mineral resource taxes. Few companies, they claim, can pay their dues in full without slipping into debt. In principle, everyone who earns income from companies and organizations to individual citizens is required to pay taxes. However, the growing mountain of unpaid dues reflects a broader failure to keep pace with economic reality.

According to A.Munkhzaya, a consultant at the financial and tax advisory firm Bodit Credit, “While wages and pensions have gone up and sales have increased, real profits have not. Inflation, a volatile exchange rate, and import dependence have eroded earnings. Unless tax amounts and thresholds are adjusted to reflect net profits, businesses won’t grow. A company that made 5 billion MNT five years ago might now record 7 to 8 billion MNT simply because of exchange-rate differences, but its actual profit hasn’t changed, and it’s taxed all the same,” she said. 

She added that inconsistencies in how VAT is applied and exemptions are granted create even more obstacles. As long as the tax environment and rates remain as they are, no amount of “preferential loans” will truly support business growth, A.Munkhzaya informed.

Economist and financial analyst Ch.Batsuuri offers a more nuanced view. He argues that rising tax and social insurance debts do not necessarily mean businesses are losing money or being crushed by taxation. “Our tax rates are not higher than the global average. But monitoring and transparency have improved, reducing the scope for hiding income and creating the perception that debt is growing. In many cases, the issue isn’t excessive taxation but tighter enforcement and clearer oversight,” he explained.

To provide relief, the Government is considering raising the threshold for small and medium-sized enterprises eligible for the 90 percent tax refund from 1.5 billion to 2.5 billion MNT, and expanding the simplified one percent VAT regime to cover businesses with annual revenue up to 400 million MNT. Plans to implement these reforms next year are included in the latest tax package proposals.

Still, most experts agree that closing bank accounts should be a measure of last resort. “Businesses won’t solve their problems simply by reopening accounts or declaring amnesty. Success depends on managing finances wisely and enforcing fair, balanced tax policies,” A.Munkhzaya warned. 

Officials at the Ministry of Finance share a similar concern. A representative emphasized that while most taxpayers meet their obligations, blanket amnesty could encourage negligence and undermine trust in the system. The official noted that previous amnesty measures had even contributed to Mongolia’s inclusion on the Financial Action Task Force’s “Gray List,” as they risked legitimizing untraceable or illicit funds. Given that risk, the Government is steering away from one-off pardons and instead focusing on structural changes to ensure fairer taxation, lower burdens, and a healthier relationship between the state and the business community. The upcoming reforms may well mark the first real step toward that goal.

Bank of Mongolia to support commercial banks securing long-term foreign funding www.gogo.mn

On April 28, G.Enkhtaivan, Deputy Governor of the Bank of Mongolia (BoM), addressed a press conference to outline new measures aimed at supporting commercial banks that successfully attract long-term external resources.

During the briefing, G.Enkhtaivan noted that foreign funding within the banking sector has been increasing, though these resources were previously excluded from mandatory reserve calculations. Following a recent decision by the Monetary Policy Committee, the central bank will now actively support banks in securing long-term foreign funding. This policy is intended to alleviate potential pressure on the tugrik exchange rate and the balance of payments, both of which remain vulnerable to volatility in international markets.

The move comes amid heightened global uncertainty, with Enkhtaivan citing Middle East instability and Brent crude oil prices hitting $110 per barrel this morning. Currently, foreign assets make up 25 percent of commercial bank resources, and the BoM aims to stabilize these holdings to ensure systemic financial health over the coming years.

To support this initiative, the central bank will facilitate currency swaps and assist in converting foreign resources with maturities exceeding 360 days into tugriks.

UNDP, GEF, and Government of Mongolia Launch Green and Inclusive Cities Initiative to Transform Urban Development www.undp.org

 The United Nations Development Programme (UNDP), in partnership with the Ministry of Environment and Climate Change of Mongolia and with funding from the Global Environment Facility (GEF), has launched the “Green and Inclusive Cities in Mongolia” project to advance climate-resilient, low-carbon, and nature-positive urban development in Ulaanbaatar, Darkhan, and Erdenet.

The five-year initiative will support the targeted cities to embed climate action, biodiversity conservation, and social inclusion into urban development plans, spatial and land-use planning, and municipal budgeting processes. Reforms will focus on strengthening urban governance, enhancing municipal financial management, and expanding access to innovative financing instruments, such as blended finance, public-private partnerships, and green municipal bonds.

“The Government of Mongolia is committed to steering urban development toward a greener, more inclusive, and climate-resilient pathway,” said the H.E. Mr. Sandag-Ochir Tsend, Minister of Environment and Climate Change of Mongolia. “In line with this commitment, the draft Law on Climate change will be submitted for discussion at the Government meeting tomorrow. At the same time, the launch of the “Green and Inclusive Cities in Mongolia” project is expected to make a significant contribution to ensuring the implementation of the Law on Climate Change once it is adopted. The project aims to integrate climate change and biodiversity considerations into urban planning and investment while strengthening coordination at the national and local levels. This approach is fully aligned with Mongolia’s priority policies on climate change mitigation and adaptation.”

The project is part of the GEF-8 Global Sustainable Cities Integrated Program, implemented by the Ministry of Environment and Climate Change with UNDP providing technical support. The project will support low‑carbon heating, clean transportation, flood protection, and large‑scale ecological restoration of nearly 40,000 hectares of degraded land. Through innovation, digital solutions, and active public engagement, the initiative fosters inclusive, gender‑responsive growth and long‑term urban resilience.

Ms. Matilda Dimovska, UNDP Resident Representative in Mongolia, emphasized that “At its core, this project is about transforming how cities plan, finance, and deliver development. By combining policy reform, innovative financing, and targeted investments, it supports cities to become more resilient, livable, and inclusive while contributing to global climate and biodiversity goals.”

By embedding sustainability within core urban governance and investment systems, the project will generate transferable models and practical knowledge for cold-climate, rapidly urbanizing countries.

About GEF

The Global Environment Facility (GEF) is the world’s largest multilateral fund for the environment. Its family of funds work together to address the planet's most pressing challenges in an integrated way. Its financing helps developing countries address complex challenges and work towards meeting international environmental goals.

About UNDP

The United Nations Development Programme (UNDP) is the leading United Nations organization working to end poverty, reduce inequalities, and build resilience to crises and shocks. Operating in more than 170 countries and territories, UNDP partners with governments, civil society, and the private sector to help countries develop integrated, lasting solutions for people and planet.

Jade Gas Holdings Secures Key Approval for Mongolian Gas Production Licence www.smallcaps.com.au

Jade Gas Holdings (ASX: JGH) has cleared a major regulatory hurdle for its Mongolian gas project, taking a key step towards booking reserves and applying for a production licence.

Mongolia's regulator, MRPAM, has approved Jade's TTCBM Project Appraisal Report, marking the formal completion of the project's appraisal phase.

This approval is a prerequisite for formally booking reserves and registering them with the Mongolian Minerals Council (MRC).

The approved report covers a 4.2km2 area, with the economic analysis based on one out of the three to six known gassy coal seams in the project area.

Pathway to Production Licence Unlocked
Following MRC registration, Jade will submit its Plan for Development of Operations (PDO) that outlines a Phase 1 drilling campaign of up to 175 wells.

Broader field development contemplates approximately 800 wells and a potential project life exceeding 30 years.

Upon PDO approval, Jade will apply for its exploitation licence, enabling the transition towards commercial gas production at scale.

The company continues to engage in positive commercial discussions with domestic and international partners, energy buyers, and infrastructure providers.

Environmental and social impact assessments that form part of the regulatory submissions required for the exploitation licence process are ongoing.

Recent Funding and Operational Progress
Jade recently completed an A$1.8 million placement in March 2026 at A$0.03 per share to support commercial and strategic activities for the Red Lake gas field.

The company's 2025 Annual Report detailed the successful drilling of Mongolia's first horizontal CBM wells.

Continuous gas production commenced in June and August 2025 from two wells at the South Gobi Red Lake Project.

Commercial progress in 2025 also included a conditional LNG Gas Sale Agreement with UB Metan.

Furthermore, a non-binding Letter of Intent (LOI) was signed with Langrun for infrastructure financing.

Outlook and Risks
Jade Gas has achieved a significant regulatory milestone, clearing the path for reserve booking and a production licence application.

While this de-risks the project's progression, the company still faces substantial execution, funding, and regulatory risks as it aims to scale up development and achieve commercial gas production.

Investors will be monitoring the progression of regulatory approvals for an exploitation licence, the achievement of maiden gas reserve booking, and the company's strategy for ongoing funding to meet operational and development expenditure.

Market Entering Short-term Stable Growth www.montsame.mn

MONTSAME National News Agency, in cooperation with “MICC Securities” LLC (MICC Mongolia International Capital Corporation), is providing readers with a weekly overview of Mongolia’s domestic capital market and economic developments.

Weekly Capital Market and Economic Overview

(2026.04.20–2026.04.26)

MONGOLIAN STOCK EXCHANGE

During the week, a total of 13.25 million securities worth MNT 6.37 billion were traded on the Mongolian Stock Exchange. Khan Bank JSC, Golomt Bank JSC, Ard Credit NBFI JSC, XacBank, and APU JSC led trading by value.

During this period, two block trades were executed, specifically:

610,000 shares of Golomt Bank JSC (GLMT) at MNT 1,240 per share, totaling MNT 756.4 million;
6.67 million shares of Ard Credit NBFI JSC (ADB) at MNT 122 per share, totaling MNT 812.93 million.

Last week, the Mongolian Stock Exchange indices closed higher, maintaining a positive market sentiment. The TOP-20 Index rose by 1.41%, the MSE A Index by 1.53%, and the MSE B Index by 0.16%.

This growth continued the recovery trend observed in the previous week, indicating sustained buying activity in the market. In particular, the increase in the MSE A Index reflects relatively strong performance among large- and mid-cap stocks. Meanwhile, the modest rise in the MSE B Index suggests continued stability and limited movement in the small-cap segment.

Overall, the market appears to be entering a short-term phase of stable growth, with previous seasonal and technical factors (such as ex-dividend effects and seasonal volatility) gradually subsiding.

FUEL PRICES, GEOPOLITICS, AND THE CAPITAL MARKET: EXTERNAL PRESSURES ON MONGOLIA’S ECONOMY

At the regular Cabinet meeting held on April 22, 2026, Prime Minister N. Uchral presented an update on the economic situation. Rising global oil prices—driven by geopolitical tensions in the Middle East—are affecting the domestic fuel market.

Specifically, there are conditions for increases in domestic fuel prices:

Regular diesel rising by MNT 2,200 to MNT 5,200;
Euro-5 diesel to MNT 5,300;
AI-95 gasoline to MNT 4,100.
 
The government is monitoring the situation and has submitted a draft law to Parliament seeking authority to set import customs duty rates. However, on April 23, the government stated that fuel prices would not increase sharply.

Fuel risk: Rising diesel and AI-95 prices may increase production costs in transport, mining, and agriculture.

Legal measures: The government submitted an urgent bill to gain flexibility in setting customs duties.

MSE outlook: After reaching historic highs earlier in 2026, benchmark indices may continue to decline.

Inflation pressure: Inflation is projected to remain around 7.0% in 2026 due to rising fuel and energy prices.

Fluctuations in global oil prices create additional inflationary pressure for a country that relies entirely on fuel imports. While flexible customs tariff policies may help contain short-term price spikes, they could place pressure on fiscal revenues in the medium term.

For the Mongolian Stock Exchange, rising costs in fuel, transport, and food sectors may be reflected in second-quarter earnings reports, potentially deepening stock price declines.

INDUSTRIAL OUTPUT GREW BY 61% IN Q1 2026, DRIVEN BY MINING

According to preliminary Q1 2026 data from the National Statistics Office, total industrial output reached MNT 16.4 trillion, increasing by MNT 6.2 trillion, or 61.2%, year-on-year. This marks significant growth compared to MNT 8.7 trillion in 2023, MNT 11.7 trillion in 2024, and MNT 10.2 trillion in 2025.

The main driver of this growth was the mining and extractive sector. Output in this sector reached MNT 13.6 trillion, growing by 74.2%. This was largely driven by:

Metal ore extraction, which increased 2.3 times (MNT 4.8 trillion);
Coal production, which rose by 28.0% (MNT 1.0 trillion).
 
Total sales also reached MNT 18.8 trillion, up 75.3%, with metal ore extraction accounting for 62.9% of exports.

Key indicators:

About 94% of total growth came from the mining sector, indicating continued risks to economic diversification.
Copper concentrate (metal content) increased by 36.4% to 611 thousand tons.
Coal output rose by 68.7% to 25.7 million tons, reinforcing its role as a key export commodity.
Cement production increased by 96.7% to 171 thousand tons, reflecting rising demand in construction and infrastructure.
The food and beverage sector weakened: beverages declined by 18.2% and meat production by 62.3%.
The industrial production volume index reached 214.0 (2015=100) in March 2026, down 14.1% year-on-year.
 
While overall output growth is strong, it is largely driven by mining. The decline in the physical volume index suggests that nominal price effects are outweighing real production growth. Investors should therefore carefully distinguish inflation effects in market valuations.

EXPORT OF PLANT-BASED PRODUCTS GROWS, BUT MARKET CONCENTRATION REMAINS HIGH

Over the past year, Mongolia’s exports of plant-based products reached 183.5 thousand tons, maintaining a steady upward trend. However, 86% of total exports were directed to China, indicating continued high market concentration. In terms of export structure, 75% consists of cultivated crops; 24% processed products; 1% timber materials.

Key export products include rapeseed, feed bran, and hay:

Rapeseed: 100.8 thousand tons
Bran: 27.9 thousand tons
Hay: 23.7 thousand tons
Potatoes: 10.8 thousand tons

Smaller volumes of sea buckthorn, carrot juice, and pine nuts were also exported.

The growth in exports has stimulated activity in the agricultural sector, supporting crop diversification, improved soil fertility, and higher yields. However, the high concentration in a single export market continues to pose risks.

Overall, while plant-based exports are supporting agricultural performance, further progress in market diversification and value-added production remains crucial.