The Bank of Mongolia has expressed a cautious outlook for the national economy next year, highlighting potential challenges linked to slowing external demand and weakening commodity prices.
According to B.Lkhagvasuren, Governor of the Bank of Mongolia, the future balance of payments will largely depend on global mineral prices, tariff policies, and the economic performance of Mongolia’s key trading partners.
“The economic growth of our main trading partner, China, is expected to slow further. Therefore, the outlook for coal and iron ore prices is not certain” said B.Lkhagvasuren.
“At a time when export revenues are declining, it is essential to pursue an optimal combination of macroeconomic policies and reduce the current account deficit. Major construction projects should also be implemented without placing additional pressure on foreign exchange reserves.”
He added that rising geopolitical tensions, a decline in external demand, and a faster-than-expected drop in key export commodity prices could negatively affect Mongolia’s export revenues and foreign exchange inflows.
Other risk factors include potential oil supply disruptions, severe winter weather, and power outages, all of which could raise inflation and slow economic activity.
Despite these internal and external challenges, the Central Bank expects inflation to stabilize within 6 ±2 percentage points in 2026 and to gradually decline to 5% by 2027.
B.Lkhagvasuren emphasized that achieving these targets will require government support and the implementation of counter-cyclical fiscal policies to maintain economic stability.

Published Date:2025-10-13