G. Zandanshatar: 'Gas Pipeline Through Mongolia to Become Millennium-Scale Project' www.montsame.mn

Prime Minister Zandanshatar Gombojav, accompanied by the ministers, presented the draft consolidated budget of Mongolia for 2026 and briefed journalists on August 2, 2025, highlighting an agreement to construct a natural gas pipeline from the Russian Federation to the People’s Republic of China through Mongolian territory.
The Prime Minister stated, “There are two important announcements to make. First, the international credit rating agency Fitch Ratings has maintained Mongolia’s Long-Term Foreign-Currency Issuer Default rating at ‘B+, Stable.’ Second, the Russian Federation’s company, ‘Gazprom,’ and the Republic of China’s CNPC have signed a Memorandum of Understanding to initiate the construction of the ‘Soyuz Vostok’ (Power of Siberia 2) pipeline project through Mongolia. This is an unprecedentedly large-scale project, not in a century but in a millennium. Following the summit of the three countries’ Heads of State, the two companies agreed to implement this major project through Mongolia, including increasing gas procurement. This is a long-term, massive project. We are pleased to lay the foundation for a development initiative that creates opportunities for Mongolia.”

Xi urges Russia, Mongolia to block ‘external interference’, forge deeper economic ties www.scmp.com

Chinese President Xi Jinping on Tuesday urged Russia and Mongolia to deepen their energy and financial bonds with his country while fending off “external interference”.
The three countries must further strengthen “solidarity” amid increasingly turbulent international dynamics, Xi said during his first trilateral summit with Russian counterpart Vladimir Putin and Mongolian President Khurelsukh Ukhnaa in three years.
“China is ready to work with Russia and Mongolia to strengthen political mutual trust … eliminate external interference and jointly promote high-quality development of trilateral cooperation,” Xi said at the summit in Beijing, according to state news agency Xinhua.
China and Russia have boosted economic and security ties as both face growing geopolitical pressure from the West. But Mongolia – a de facto buffer zone between the two nuclear giants during the Cold War – has seemingly placed greater emphasis on its “third neighbour” foreign policy.
By that approach, the landlocked country has worked to develop partnerships with the United States, Japan, South Korea and the European Union to diversify its diplomacy, trade and security relations beyond Beijing and Moscow.
Chinese President Xi Jinping (centre) hosts his Russian and Mongolian counterparts during a trilateral meeting at the Great Hall of the People in Beijing on Tuesday. Photo: Xinhua
Chinese President Xi Jinping (centre) hosts his Russian and Mongolian counterparts during a trilateral meeting at the Great Hall of the People in Beijing on Tuesday. Photo: Xinhua
As the US-China strategic rivalry continues to intensify over trade and technology, with rare earths – critical to semiconductor and clean energy sectors – now a key bargaining chip, Mongolia’s vast mineral wealth has elevated its strategic significance in the global political landscape.
Mongolia’s 2023 memorandum of understanding on critical minerals collaboration with the US made this clear.
During a phone call in May, Mongolian Foreign Minister Battsetseg Batmunkh and US Secretary of State Marco Rubio “expressed their satisfaction with the vitality of Mongolia-US relations and cooperation”, according to Ulaanbaatar.
In Beijing on Tuesday, Xi called for prioritising “hard connectivity” between the three countries by “advancing cross-border infrastructure and energy projects”, according to Xinhua.
He also urged the three countries to “expand local currency settlements” and align their development strategies amid the growing global resistance to the dominance of the US dollar and China’s push for greater international use of the renminbi.
Putin sought to emphasise the strong ties among the three nations. Russia “sincerely strives for the comprehensive development of mutually beneficial, equal and multifaceted relations” with both China and Mongolia, he said, adding: “Our three countries have much in common.”
“We share an interest in developing political, economic and humanitarian ties between our countries. And most importantly, Russia, China and Mongolia are good neighbours.”
Khurelsukh said that Mongolia had “consistently made efforts to deepen bilateral and trilateral relations and cooperation” with China and Russia in “all areas”.
“The Mongolian side attaches particular importance to the implementation of joint projects in areas such as the development of economic corridor infrastructure, transport, logistics, energy and trade,” he added.
The China–Mongolia–Russia economic corridor is one of the major components of Beijing’s transcontinental Belt and Road Initiative, which has seen slow progress since Moscow launched its full-scale invasion of Ukraine in February 2022.
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Ulaanbaatar did not include the Power of Siberia 2 natural gas pipeline connecting Russia and China in its action programme through 2028, which was announced last year, a decision interpreted by many as a shelving of the controversial project.
The pipeline is expected to deliver 50 billion cubic metres (1.77 trillion cubic feet) of natural gas annually from Russia to China, nearly matching the pre-idle flow via Nord Stream 1 between Russia and Europe. But whether it would pass through Mongolia has been discussed for years.
The project could help Moscow continue to sell its vast gas output while also addressing Beijing’s energy import needs.
Despite the omission by Mongolia, the project appears to be on track.
According to Russia’s official Tass agency, “based on the public statement made by the leaders of three countries – Russia, China and Mongolia – a legally binding memorandum” was signed on Tuesday between Russian energy giant Gazprom and the Chinese state-owned China National Petroleum Corporation on the construction of the mega gas pipeline.
The project would transit through Mongolia, the report said, quoting Gazprom CEO Alexey Miller.
Earlier this year, the Mongolian parliament ratified a long-stalled deal with China to build a new cross-border railway, which was also viewed as a sign of Ulaanbaatar’s move to tighten economic ties with Beijing amid US President Donald Trump’s global tariff wars.
Both Putin and Khurelsukh attended the Shanghai Cooperation Organisation (SCO) summit hosted by Xi on Monday in northern China’s Tianjin, where Mongolia’s status was elevated from observer to a “partner” of the grouping.
Their last trilateral gathering was on the sidelines of the September 2022 SCO summit in Samarkand, Uzbekistan, under a mechanism launched in 2014.
The Russian and Mongolian leaders will also be attending the grand military parade in Tiananmen Square on Wednesday to mark the 80th anniversary of the end of World War II.
“It is gratifying to note that the peoples of our three countries are always united in their desire to preserve historical memory,” Khurelsukh said during the three-way meeting.
Japan’s Emperor Naruhito and Empress Masako paid a historic week-long visit to Mongolia in July, during which they visited a memorial honouring the thousands of Japanese held as prisoners during World War II.
Xi earlier on Tuesday had a one-on-one meeting with Khurelsukh, where he pledged that China would always be a “reliable and dependable” partner to Mongolia regardless of changes in international circumstances, according to Xinhua.
Khurelsukh told Xi that maintaining a permanent friendship with China was a diplomatic priority for Mongolia.
BY Orange Wang
Based in Beijing, Orange covers a range of topics including China's economy and diplomacy. He previously worked in Hong Kong and had a stint in Washington. Before joining the Post, Orange worked as a Shanghai Correspondent for ET Net, a Hong Kong financial news agency.

Xi says China willing to work with Russia, Mongolia to strengthen mutual trust, cooperation www.aa.com.tr

Chinese President Xi Jinping on Tuesday said his country is willing to work with Moscow and Ulaanbaatar to strengthen mutual trust and trilateral cooperation amid a summit with his Russian and Mongolian counterparts in Beijing, according to a statement by the Kremlin.
“China is willing to work with Russia and Mongolia to strengthen political mutual trust, uphold the original goal of cooperation, eliminate external interference, and jointly promote high-quality development of trilateral cooperation,” Xi said in opening remarks during the summit held in the Chinese capital, the statement noted.
The trilateral talks took place a day after Xi hosted the 25th Heads of State Council of the Shanghai Cooperation Organization in the city of Tianjin, northern China.
The trilateral cooperation between China, Russia, and Mongolia has been developing steadily with “real results,” Xi said, adding that the medium-term roadmap in this regard is being successfully implemented.
The trade turnover between the three countries is steadily growing, while trilateral cooperation in various sectors is “consistently deepening,” with new impetus given by key joint projects within the framework of the program for the creation of an economic corridor, he noted.
For his part, Russian President Vladimir Putin stated Moscow’s strive for the development of “mutually beneficial, equal, and multifaceted” relations with both Beijing and Ulaanbaatar.
“At the same time, we consider it important that successful bilateral cooperation be supplemented and acquire new facets through a trilateral format of interaction,” Putin said, citing that the three countries have “much in common.”
“We share an interest in the joint development of political, economic, and humanitarian ties. And most importantly, Russia, China, and Mongolia are good neighbors, and our peoples are united by long-standing traditions of friendship and mutual support,” Putin added, expressing his confidence that the meeting will focus on the main areas of trilateral cooperation and address plans for the future.
Meanwhile, Mongolian President Ukhnaagiin Khurelsukh noted his country’s efforts to deepen bilateral and trilateral relations and cooperation with its two neighbors in all areas, as well as to expand mutually beneficial interaction and collaboration.
Khurelsukh argued the three countries expanded their trilateral cooperation significantly over the past decade, underlining that “specific results have been achieved in the implementation of the program to create an economic corridor."
“I would like to note that the Mongolian side attaches particular importance to the implementation of joint projects in such areas as the development of economic corridor infrastructure, transport, logistics, energy and trade,” he said.
The three countries, at Mongolia’s initiative, held the first meeting between their heads of government in Pakistan’s capital Islamabad last year, the president noted, adding that an agreement was reached in principle to hold the next meeting in this regard in Russia.
“We believe that this meeting of the heads of government of the three countries plays an important role in the practical implementation of the agreements reached at the level of heads of state, as well as the coordination and agreed implementation of strategies and development programs of our countries,” he said.

Russia strives to develop equal, multifaceted relations with China, Mongolia - Putin www.interfax.com

Russia sincerely wishes to develop relations with both Mongolia and China, Russian President Vladimir Putin said at a trilateral meeting with the Mongolian and Chinese leaders.
"Russia sincerely strives for the comprehensive development of mutually beneficial, equal and multifaceted relations with both the People's Republic of China and Mongolia," Putin said.
Russia also thinks it is important that successful cooperation be filled with content and acquire new facets, he said.
Russia, China and Mongolia are good neighbors, Putin said.
"Russia, China and Mongolia are good neighbors, and our peoples are united by the traditions of friendship and mutual support," he said.
Putin thanked Chinese President Xi Jinping for hospitality and the trilateral meeting initiated by him.
Putin met with Xi and Mongolian President Ukhnaagiin Khurelsukh in Beijing.

Relations between the New Zealand and Mongolian Parliaments have begun to operate at a new level www.parliament.mn

Chairman D. Amarbayasgalan of the State Great Hural (Parliament) of Mongolia held official talks today (September 2, 2025) at the State Palace with Gerry Brownlee, Speaker of the House of Representatives of the New Zealand Parliament, who is on an official visit to Mongolia.
Chairman D. Amarbayasgalan emphasized that Speaker Gerry Brownlee’s visit marks the first-ever visit to Mongolia at the level of the head of Parliament from New Zealand. While expressing gratitude to the New Zealand parliamentary delegation for this historic visit, he also extended congratulations on the occasion of the 50th anniversary of diplomatic relations between Mongolia and New Zealand, which will be celebrated in 2025.
He expressed confidence that this visit by Speaker Gerry Brownlee and the members of the New Zealand Parliament will provide a significant impetus to deepen mutual understanding and cooperation between the legislative bodies of the two countries, which have developed based on shared values of human rights and democracy, turn discussions into concrete actions, and strengthen relations between parliamentary friendship groups.
Chairman D. Amarbayasgalan also highlighted that there are broad opportunities for cooperation to elevate collaboration in key economic sectors between Mongolia and New Zealand, particularly in agriculture. These include introducing advanced technologies for sheep shearing and intensive livestock farming in Mongolia, as well as localizing the experience of developing cooperative farms.
Gerry Brownlee, Speaker of the House of Representatives of the New Zealand Parliament, expressed his pleasure that relations between the two countries have continued to develop based on shared democratic values that uphold human rights, freedom, and the rule of law. As a member of the New Zealand House of Representatives since 1996, he affirmed his ongoing support for strengthening relations between the legislative bodies of Mongolia and New Zealand and for deepening bilateral cooperation in all mutually beneficial areas.
He also commended Mongolia’s diligent efforts since 1992 to strengthen its parliamentary governance and initiate legal and regulatory reforms. Furthermore, he noted that the principle within the State Great Hural (Parliament) of Mongolia’s “Three Pillars of Excellence” policy—that laws should evolve in line with the times—is particularly relevant and valuable for New Zealand as well.
Both sides mutually noted that this visit marked a high-level celebration of the 50th anniversary of Mongolia–New Zealand relations, strengthened mutual trust between the two countries, enhanced connections between their legislative bodies, and made a significant contribution to expanding and deepening bilateral relations and cooperation across all mutually beneficial areas.
Within the framework of the visit, both sides welcomed the decision for Mongolia’s Ministry of Food, Agriculture, and Light Industry to sign a Memorandum of Understanding with the New Zealand-based non-profit organization “Share Mongolia,” which is introducing modern sheep-shearing equipment and technology in Mongolia and making a tangible contribution to the livelihoods of herders.

Mongolia-EU Business and Investment Forum to take place in Ulaanbaatar www.akipress.com

Minister of Digital Development, Innovation and Communications of Mongolia Batshugar Enkhbayar met with Ambassador of the European Union to Mongolia Ina Marčiulionytė
The sides exchanged views on the programs and measures implemented in the telecommunications and information technology sectors, as well as on future areas of cooperation as part of the economic diversification from the mining industry and the development of the e-economy.
Minister Batshugar Enkhbayar also expressed interest in expanding cooperation by involving private sector organizations in the forum, which is planned to be held in Ulaanbaatar in October.
"After over 35 years of fruitful collaboration between the European Union and Mongolia, we are excited to invite you to the inaugural Mongolia-EU Business and Investment Forum. This momentous event is a premier platform for strengthening economic ties, fostering trade relations, and promoting investment opportunities between the European Union and Mongolia. As Mongolia continues to modernize and diversify its economy, the EU remains a key strategic partner, supporting innovation, infrastructure, and industry growth," the forum organizers say.
Mongolia, strategically located between China and Russia, is a rapidly developing market with vast natural resources and a young, dynamic workforce. Known for its rich deposits of minerals such as copper, gold, and coal, the country has traditionally relied on mining as its primary economic driver. However, Mongolia is now actively diversifying its economy, with growing sectors such as renewable energy, agribusiness, digital transformation, and sustainable tourism.
The Mongolia-EU Business and Investment Forum brings together policymakers, industry leaders, and investors to explore strategic collaborations, unlock new market opportunities, and strengthen the long-term partnership between the EU and Mongolia.
With a commitment to economic reforms, Mongolia offers a favorable investment climate through an open-market economy, improved legal frameworks, and incentives for foreign investors. The government is also focused on enhancing connectivity, infrastructure, and regional trade partnerships to create a more competitive and business-friendly environment.
The EU is one of Mongolia's largest development partners, supporting projects that drive sustainable economic growth, governance reforms, and innovation. The EU-Mongolia Economic Partnership Agreement facilitates trade by reducing tariffs and improving market access for businesses on both sides.

1.2 million students to attend schools in Mongolia in 2025-2026 academic year www.akipress.com

Fitch Affirms Mongolia at 'B+'; Outlook Stable www.fitchratings.com

Fitch Ratings - Hong Kong - 01 Sep 2025: Fitch Ratings has affirmed Mongolia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+' with a Stable Outlook.
A full list of rating actions is at the end of this rating action commentary.
Key Rating Drivers
Strengths and Weaknesses: Mongolia's ratings are supported by strong medium-term growth, modest government debt and high per capita income relative to 'B' category peers. The ratings are constrained by the country's high reliance on external funding and commodity exports to China, making it vulnerable to external shocks. High external debt, modest foreign-exchange reserves, and a record of procyclical economic policy add to external vulnerabilities. Mongolia scores well on World Bank Governance Indicators (WBGIs) relative to 'B' category peers but has suffered from policy uncertainty.
Resilient Growth: We forecast real GDP growth will pick up to 5.7% in 2025, from 5% in 2024, driven by an agricultural recovery after two harsh winters. Coal exports have fallen by 40% in the first seven months of 2025 due to a price shock, but strong copper exports have largely offset the impact. We expect growth to remain robust at 5.3% in 2026 and 2027, underpinned by continued investment in the mining sector and solid non-mining activity. However, a potential shift in Chinese demand for Mongolia's mining exports remains a key downside risk.
Mining and Infrastructure-Driven Expansion: Major mining and infrastructure projects continue to bolster medium-term growth. The underground phase of the Oyu Tolgoi copper mine continues to support gradual increases in production. Construction of a new cross-border railway linking Mongolia to China's ports began in June 2025 and we expect it to boost transportation capacity by 30 million tonnes annually upon completion in 2027.
Moderate Fiscal Deficits: Fitch projects a fiscal deficit of 1.8% of GDP in 2025, following a 1.3% surplus in 2024. The amended 2025 budget, passed in August, cut current and capital expenditure by MNT1.3 trillion and MNT500 billion, respectively, in response to a MNT3.3 trillion (about 3.5% of GDP) revenue shortfall. The revised budget projects a structural balance of 1.5% of GDP deficit, which excludes allocations to the Fiscal Stabilisation Fund (FSF) and the Sovereign Wealth Fund (SWF), implying an overall surplus of 1.1% of GDP. However, revenue assumptions may be difficult to meet, with collections at only 51% of the revised target through July.
Expansionary Pro-Cyclical Policy: We expect the non-mineral primary fiscal deficit to widen to 15% of non-mining gross value added in 2025 and 2026, from 12.9% in 2024. Fiscal rules have been strengthened in recent years, but the implementation record is still short, implying uncertainty about enforcement during external shocks. Some rules, such as the current expenditure cap at 30% of GDP, are inherently pro-cyclical and allow for higher spending during periods of strong economic growth. Government spending reached a record 38.2% of GDP in 2024 amid historically strong revenue from the commodity boom.
Stable Debt; Contained Maturities: Fitch projects government debt to decline to below 40% of GDP in the medium term, from 41.8% of GDP at end-2024, following sharp declines since the pandemic. However, a substantial share of public debt is denominated in foreign exchange, highlighting exchange-rate risk. The government partially refinanced external debt securities maturing in 2026 and 2027 earlier this year, further smoothing the maturity profile. The government holds deposits exceeding 10% of GDP, including about 6% of GDP in the SWF and 2% of GDP in the FSF, mostly with the central bank and partly reflected in reserves.
Elevated Inflationary Pressure: Headline inflation accelerated to 9.6% in February 2025 before easing slightly in recent months. Fitch forecasts inflation to average 8.5% in 2025-2026, driven by strong domestic demand, higher utility tariffs and rapid credit growth, which is above the Bank of Mongolia's (BoM) 4%-8% target. The BoM raised its policy rate by 2 percentage points to 12% in March 2025 after multiple cuts in 2024 and has tightened banks' reserve requirement three times since 4Q24.
Persistent External Vulnerabilities: Fitch expects the current account deficit to widen to 12% of GDP in 2025, from 10.5% in 2024, and to remain elevated over the medium term. The deficit is largely financed by foreign direct investments, but structurally large service and primary income deficits constrain reserve accumulation from commodity exports. Gross FX reserves stood at USD5.4 billion as of July 2025 (just over three months of external payments), which is low given Mongolia's narrow economic base. Net foreign assets rose to USD4 billion after partial repayment of swap liabilities to the People's Bank of China.
Net external debt, at about 120% of GDP at end-2024, is nearly 6x the 'B' median, although over 30% of this is FDI, and more than 20% are concessional loans, both of which we expect to remain stable sources of funding. Mongolia is among the world's most commodity-dependent sovereigns, with mineral exports (almost entirely to China) accounting for 90% of external receipts and 30% of government revenue.
ESG - Governance: Mongolia has an ESG Relevance Score of '5[+]' for Political Stability and Rights and '5' for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. These scores reflect the high weight that the WBGIs have in our proprietary Sovereign Rating Model. Mongolia has a medium WBGI ranking at the 47th percentile.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
- External Finances: Materialisation of significant external stress, potentially undermining external financing flows and leading to a decline in foreign reserves, for example, as a result of a commodity shock amid expansionary domestic economic policies.
- Public Finances: Significant increase in the government debt/GDP ratio, for example, from sustained budget deficits or weaker medium-term growth prospects.
- Structural Features: Political instability or major policy shifts sufficient to significantly disrupt strategic mining projects or FDI inflows.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
- External Finances: Reduction in external financing risks, for example, through significant accumulation of foreign-currency reserves and a fall in net external debt, accompanied by prudent external debt management.
- Public Finances: Implementation of prudent fiscal policies, which reduce pro-cyclicality and are consistent with reductions in the government debt/GDP ratio and the build-up of fiscal buffers.
- Macroeconomic and Structural: Sustained strong economic growth without the emergence of imbalances, supported by a business environment conducive to robust FDI inflows.
Sovereign Rating Model (SRM) and Qualitative Overlay (QO)
Fitch's proprietary SRM assigns Mongolia a score equivalent to a rating of 'BB-' on the Long-Term Foreign-Currency (LT FC) IDR scale.
Fitch's sovereign rating committee adjusted the output from the SRM score to arrive at the final LT FC IDR by applying its QO, relative to SRM data and output, as follows:
- External Finances: -1 notch, to reflect Mongolia's vulnerability to external shocks, given its dependence on commodity exports to China, particularly coal, as well its high external financing needs and debt in the context of modest FX reserves.
Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.
Country Ceiling
The Country Ceiling for Mongolia is 'BB-', one notch above the LT FC IDR. This reflects moderate constraints and incentives, relative to the IDR, against capital or exchange controls being imposed that would prevent or significantly impede the private sector from converting local currency into foreign currency and transferring the proceeds to non-resident creditors to service debt payments.
Fitch's Country Ceiling Model produced a starting point uplift of +1 notch above the IDR. Fitch's rating committee did not apply a qualitative adjustment to the model result.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Mongolia has an ESG Relevance Score of '5[+]' for Political Stability and Rights, as WBGIs have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Mongolia has a percentile rank above 50 for the governance indicator, this has a positive impact on the credit profile.
Mongolia has an ESG Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality and Control of Corruption, as WBGIs have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Mongolia has a percentile rank below 50 for the respective governance indicators, this has a negative impact on the credit profile.
Mongolia has an ESG Relevance Score of '4[+]' for Human Rights and Political Freedoms, as the Voice and Accountability pillar of the WBGIs is relevant to the rating and a rating driver. As Mongolia has a percentile rank above 50 for the governance indicator, this has a positive impact on the credit profile.
Mongolia has an ESG Relevance Score of '4[+]' for Creditor Rights, as willingness to service and repay debt is relevant to the rating and is a rating driver for Mongolia, as for all sovereigns. As Mongolia has a record of more than 20 years without a restructuring of public debt and captured in our SRM variable, this has a positive impact on the credit profile.
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit http://www.fitchratings.com/topics/esg/products....

Khurelsukh at SCO: ‘Mongolia Is Ready to Contribute to Regional Integration’ www.montsame.mn

President of Mongolia Khurelsukh Ukhnaa delivered a speech as an observer during the Heads of State Council’s expanded session of the Shanghai Cooperation Organisation (SCO), held at the Tianjin Meijiang Convention and Exhibition Center, People’s Republic of China.
Noting the significance of the SCO’s contributions to regional peace, security, and sustainable development, the president mentioned that Mongolia has been implementing its multi-pillar, independent foreign policy committed to peace.
Noting the importance of expanded cooperation in reducing climate change, desertification, and natural disaster risks, Khurelsukh introduced the “Billions of Trees” and “Food Supply and Security” national movements. It was also highlighted that preparations are underway for the 17th Session of the Conference of the Parties (COP17) to the United Nations Convention to Combat Desertification (UNCCD) to be held in Ulaanbaatar in 2026.
President Khurelsukh noted that Mongolia, proposing the “Transit Mongolia” goal to become a regional hub for trade, investment, and transport logistics, is making active efforts to jointly implement significant road and rail transportation, energy, and tourism projects, as well as the natural gas pipeline project, with the Russian Federation and the People’s Republic of China.
Moreover, the president expressed readiness to contribute to regional integration through expanded, mutually beneficial cooperation with all SCO member countries.
Heads of State and Government from the Russian Federation, the People’s Republic of China, the Republic of India, the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Tajikistan, the Republic of Uzbekistan, the Islamic Republic of Pakistan, the Islamic Republic of Iran, the Republic of Belarus, the Republic of Türkiye, the Republic of Azerbaijan, the Republic of Armenia, the Socialist Republic of Viet Nam, Malaysia, the Republic of Indonesia, the Lao People’s Democratic Republic, the Kingdom of Cambodia, the Republic of Turkmenistan, the Arab Republic of Egypt, the Republic of Maldives, and the Federal Democratic Republic of Nepal participated in this high-level council.
Secretary-General of the United Nations António Guterres, Secretary General of the SCO Nurlan Yermekbayev, as well as leaders of non-governmental and international organizations, discussed regional peace, security, and sustainable development.
The Heads of State Council’s expanded session of the Shanghai Cooperation Organisation (SCO) was successfully organized in Tianjin, People’s Republic of China.

Government Submits Draft 2026 Budget Totaling MNT 31.6 Trillion www.montsame.mn

Prime Minister of Mongolia Zandanshatar Gombojav submitted to Speaker of the Parliament Amarbayasgalan Dashzegve the 2026 Budget Framework Statement for the Unified Budget of Mongolia, the draft law on amending the Budget Projection Law for 2027-2028, and the draft law on the 2026 State Budget on September 1, 2025.
The balanced revenue of Mongolia’s 2026 Unified Budget is projected at MNT 31.6 trillion, while total expenditure is estimated at MNT 32.98 trillion. The budget balance is projected to have a deficit equivalent to 1.3 percent of GDP. Prime Minister Zandanshatar stated that the 2026 budget policy aims to ensure macroeconomic fiscal stability, limit the growth of public expenditures, increase citizens’ income, and maintain and further improve the quality and accessibility of basic social services at the current level.
The tax reform package is being discussed through the D-Parliament electronic platform starting September 1, 2025. This legislative package is designed to ease the tax burden by MNT 3-4 trillion, benefiting individual taxpayers and business owners. The prime minister emphasized that the proposed budget seeks to limit state intervention while expanding and supporting the private sector.
For the first time, the government has developed its budget based on public input. A total of 186,000 citizen opinions were collected through the E-Mongolia digital platform, while 239,000 individuals participated in public discussions held both in-person and online, organized by general budget governors. Among the submissions, 8,800 were duplicates. This initiative marks a significant milestone in ensuring broad citizen participation in the national budget process.
During the voting process, citizens expressed a strong desire to improve the quality and accessibility of basic social services, ensure a safe and reliable living environment, reduce budget expenditures, and increase income by lowering the tax burden. Based on this public input, several specific measures have been incorporated into the budget, including:
1. Education Sector Goals and Teacher Compensation:
In connection with the government’s declaration of 2026 as the “Year of Education”, a national goal has been set to achieve 100 percent enrollment in education and to reduce class sizes to meet standard levels. As part of the medium-term plan extending to 2028, the government will construct 95 kindergartens and 108 schools with equipment and supplies provided in phases. To support this initiative, MNT 1 trillion will be invested in the education sector next year through a combination of state budget allocations and foreign loans. Additionally, variable expenses in the education sector have been increased by MNT 100 billion to implement a salary structure that accurately reflects teachers’ workloads starting in 2026.
2. Health Sector Budget Priorities:
A total of MNT 1.3 trillion will be invested in the health sector, funded through the state budget and foreign loans. Under this initiative, construction will begin on specialized hospitals for cancer treatment, cell and organ transplantation, and cardiovascular care. Additionally, hospital buildings in 17 aimags will be renovated with targeted improvements to intensive care and emergency services. These facilities will also be equipped with essential medical equipment to ensure timely and effective treatment.
3. Social Welfare and Insurance:
To support pensioners and insured individuals, an additional MNT 378 billion will be allocated to raise social insurance and welfare pensions by 6 percent.   
4. VAT refund measure:
In an effort to reduce the tax burden on citizens, the government will increase the VAT refund by 50 percent for purchases not exceeding MNT 1 million.
5. Public-Private Financing in the Energy Sector:
The government has planned MNT 3.9 trillion for investment in the energy sector next year, sourced from MNT 373.3 billion in state budget funds, MNT 351.8 billion in foreign loans, and MNT 150 billion from bonds. The majority of the funding, MNT 2.566 trillion, will be provided by private companies.
6. Fiscal Consolidation and Budget Discipline:
In 2026, economic activity is expected to slow due to falling prices of key export commodities, reduced domestic consumption, and weakened investment conditions. Fiscal space will remain constrained at the previous year’s level, 24.0 percent of GDP, and state institutions will operate under austerity measures. Current expenditures are to be reduced by MNT 641.7 billion compared to the projected performance in 2025. These savings will be achieved through reductions in institutional operating costs, subsidies, incentives, and interest rate discounts across sectors, along with temporary deferrals in benefit payments to public sector employees.
7. Sovereign Wealth and Asset Management:
Mongolia’s National Sovereign Wealth Fund’s savings have continued to grow, with the Future Heritage Fund currently holding MNT 4,706.1 billion and the Savings Fund holding 654.4 billion, bringing the total to 5,360.5 billion. In 2026, the Sovereign Wealth Fund is expected to increase by an additional MNT 2,956.1 billion. Alongside this growth, policies aligned with sound asset management principles and a stable housing finance mechanism for citizens will be introduced within the banking and financial system. Citizens will be able to view their Savings Fund balances through the E-Mongolia electronic platform.