The Cabinet discussed budget savings, food supply, and improvements to the registration and monitoring system at its regular meeting today. Finance Minister Z.Mendsaikhan briefed the media on the decisions made.

According to the Minister, the Government has officially switched to austerity mode and approved a resolution to prioritize public spending.

The budget financing will be prioritized in three stages: First, funding will be fully secured for the salaries and pensions of civil servants, special government agencies, and operating expenses for hospitals and the education sector. Second, funding will be provided for essential government-approved events and activities. Third, all expenditures that can be postponed or reduced over the longer term will be subject to savings measures.

State budget revenue reached MNT 14.6 trillion in the first half of 2026, while expenditure totaled MNT 16.7 trillion, resulting in a preliminary balanced budget deficit of MNT 2.1 trillion.

Without expenditure controls, the government could face difficulties financing salaries, pensions, and other essential state obligations by the end of the year.

The budget deficit was caused by several factors, including: approximately MNT 1 trillion in tax revenue that would normally have been collected in 2026 being collected in advance during 2025. An additional MNT 820 billion allocated in May to eliminate salary disparities for teachers and healthcare workers.

As part of the austerity measures, government agencies will postpone anniversary celebrations and non-essential events while reducing operating expenses wherever possible.

The 2026 budget amendment will primarily include funding for the salary increases granted to teachers and healthcare workers, as well as additional financing needed to establish strategic food reserves. The amended budget will be submitted to Parliament in September together with the draft 2027 State Budget.

The government also plans to strengthen Mongolia's food security by improving the registration system for meat reserves. This autumn, the electronic registration system of the Agricultural Exchange will be integrated with the capital city's system to improve transparency and oversight.

Additional support measures will include: Reduced electricity tariffs for businesses operating food warehouses and cold storage facilities. Preferential loans for companies investing in standard-compliant storage facilities. A transparent electronic system to monitor meat procurement and reserve inventories.

The new system will:

Increase transparency in meat procurement and reserve management.

Prevent the misuse of concessional loans intended for reserve storage.

Improve market competition and accessibility.

Allow consumers to purchase meat directly from warehouses and processing facilities.

Enable herders to sell directly to end consumers through the electronic platform.

Improve the preparation and management of state meat reserves, reducing market uncertainty.

He added that the budget amendment will also include funding for electricity tariff discounts and concessional financing to expand standard food storage infrastructure.

Published Date:2026-08-06