On December 18, Governor of Mongol Bank B.Lkhagvasuren provided a comprehensive update on the country’s banking sector, economic performance and the financial outlook for 2024. Despite challenges posed by global geopolitical tensions and slower-than-expected growth in key sectors, the governor highlighted a positive trajectory for the country’s economy, supported by strong performance in the banking sector.

Governor B.Lkhagvasuren noted that the easing of monetary policies in major economies such as the USA and Europe in 2024 has been a boon for Mongolia’s foreign economy. However, he cautioned that external risks remain high, with geopolitical tensions contributing to ongoing uncertainty in the global environment.

Additionally, the Chinese economy, a key trading partner for Mongolia, is showing signs of weakness, increasing concerns about a potential drop in external demand, particularly for coal exports. As a result, there is growing apprehension regarding the impact of falling coal prices on the Mongolian economy.

Inflation in Mongolia showed a slight uptick in recent months, rising to 8.1 percent in November, compared to seven percent in October. A significant driver of this increase was the rise in electricity prices, which is expected to account for nearly two percentage points of inflation in November, a sharp rise from just 0.1 percentage points in October.

In terms of economic growth, Mongolia’s economy expanded by 3.9 percent in the third quarter of 2024, falling short of expectations. The slowdown was attributed to weaker-than-expected performance in key industries such as copper and gold mining. Given this performance, Mongol Bank has revised its growth forecast for 2024 to 5.2 percent, down from earlier predictions.

Despite this, the medium-term outlook remains positive, with economic growth expected to pick up to seven to eight percent in 2025. Key drivers of this growth include the gradual recovery from this year’s severe winter conditions (dzud), increased production at the Oyu Tolgoi copper mine, and a weaker fiscal outlook.

The governor confirmed that the central bank would maintain its policy interest rate at 10 percent to avoid excessive tightening of credit conditions and ensure stable economic growth in the medium term. Despite inflation exceeding the target range for 2024, the bank expects it to stabilize within the target range by early 2026.

To further support financial stability, Mongol Bank has decided to raise the mandatory reserve ratio for commercial banks. Starting in 2024, banks will be required to hold 11 percent of their reserves in Mongolian tugrik and 16 percent in foreign currency, an increase of one percentage point for each. This measure aims to curb the accumulation of risks in the banking sector and ensure its long-term stability.

B.Lkhagvasuren emphasized the robust health of Mongolia’s 12 commercial banks, which are showing solid indicators in terms of capital, liquidity and lending capacity. These banks are playing a critical role in supporting the economy through increased credit availability, even as Mongol Bank continues to monitor inflation and economic developments closely.

In recent months, there has been a notable shift in the banking sector’s lending focus, with consumer loans now on par with business loans, accounting for a 50:50 ratio. Loans secured by salaries and pensions are also increasing, aligned with rising government expenditures in these areas.

Governor B.Lkhagvasuren concluded that the central bank will remain agile, adjusting its policies as needed based on changes in both the domestic and global economic environments.

A special meeting of the Government was held today, December 20, 2024. Following the meeting, the Prime Minister delivered an announcement to the public, outlining the key decisions.

Prime Minister L. Oyun-Erdene marked the 100th day since the Government's action plan was approved. As of December 20, 2024, Mongolia has achieved a historic milestone by exporting a record 81.8 million tons of coal.

The state budget for 2024 has generated a surplus of 1 trillion MNT, of which 50% will be allocated to the Stabilization Fund. The National Wealth Fund has accumulated a tangible reserve of 4 trillion MNT, opening up opportunities to invest this capital for growth.

A total of 495 billion MNT has been deposited in the National Wealth Fund, translating to savings of 135,000 MNT in each citizen's account. By law, these funds are designated for use in the healthcare and education sectors. Citizens can check their savings via the e-Mongolia platform.

The Erdenes Tavan Tolgoi company has reported profitable operations. As of today, every citizen is eligible to receive 350,000 MNT in dividends. Unlike previous years, when dividends were distributed in March or April, the Government has decided to issue them during the winter months, considering current needs.

Previously, payouts of around 100,000 MNT had minimal impact on inflation. However, larger payouts of 350,000 to 500,000 MNT carry significant inflationary risks. To mitigate this, the dividend will be distributed in three installments. Considering issues like air pollution, the first installment will match the amount already saved in the Wealth Fund, which is 135,000 MNT.

In accordance with the 2024 financial report, an additional 135,000 MNT will be paid to each citizen as dividends in January or February 2025, adhering to the law. These funds will not be used for any other purpose.

Secondly, the Prime Minister acknowledged that Ulaanbaatar’s air pollution and traffic congestion have reached a critical level. Consequently, a heightened state of readiness has been declared. To urgently address these pressing issues, a special legal framework is required in collaboration with Parliament. This framework will be submitted to Parliament for discussion starting next Monday.

Members of Parliament P. Sainzorigt and N. Batsumberel presented a draft law to the Speaker of the Mongolian Parliament, D. Amarbaysgalan, which proposes the removal of restrictions on the number and percentage of foreign workers in Mongolia and the exemption of employers from job placement fees for foreign workers.

The draft law stipulates that the number and percentage of foreign workers in Mongolia will not be set until December 31, 2026, except for the mining and oil extraction sectors. During this period, employers will also be exempt from the job placement fees for foreign workers.

Between 1993 and 2006, Mongolia’s birth rate was significantly low, resulting in a shortage of domestic labor, a situation that is projected to continue until 2030. In light of this, the bill was introduced, emphasizing the need to address the labor shortage.

According to the annex to the resolution of the Mongolian Parliament in 2021 (Resolution No. 106), the “Revival of State Productivity” under the New Revival Policy includes removing limits on the number of foreign workers in the private sector, reducing job placement fees by 50%, and enabling the hiring of foreign labor to fill gaps that cannot be covered by the domestic workforce. This measure aims to address labor shortages, particularly for small, medium, and micro businesses, and halt the worsening shortage of labor in the country, as stated by MP P. Sainzorigt, as reported by the Parliament’s press service.

On December 17, 2024, President of Mongolia Khurelsukh Ukhnaa issued a Directive on Establishing a Working Group in charge of Supporting the Construction of the Second National Oncology Center of Mongolia.

The Working Group consists of Minister of Finance Javkhlan Bold, Minister of Health Munkhsaikhan Togtmol, Members of Parliament Chinburen Jigjidsuren, Altanshagai Narantsetseg, and Munkhbayasgalan Luvsanbyambaa, Deputy Chief Cabinet Secretary Byambasuren Urgamal, State-Secretary of the Ministry of Economy and Development Batkhuu Idesh, Secretary of the Nuclear Energy Commission and Head of the Executive Office Manlaijav Gun-Aajav, Rector of the Mongolian National University of Medical Sciences Damdindorj Boldbaatar, and Director-General of the National Oncology Center Erdenekhuu Nansalmaa. Senior Advisor to the President Khurelbaatar Nyamdavaa was appointed as the Head of the Working Group.

Members of the Working Group led by Senior Advisor Khurelbaatar held a briefing and provided details on the initiative. The Working Group is responsible for providing professional and methodological support for the construction of the Second National Oncology Center, which will serve as a comprehensive facility for cancer prevention, diagnosis, treatment, research, and training. The Working Group will also work towards addressing the causes and conditions that lead to cancer, strengthening interdisciplinary responsibility and accountability, and ensuring the delivery of high-quality, accessible services that meet international standards.

The Second National Oncology Center will be located on 12 hectares of land near the “Nairamdal” International Children’s Camp, the 34th khoroo of Songinokhairkhan district of Ulaanbaatar. The facility, covering 95,000 square meters, is projected to be completed and operational within 4-5 years. Specifically, the necessary funding for its infrastructure, which is equivalent to MNT 38 trillion, has been included in the 2025 State Budget of Mongolia.

Cancer-related incidence, mortality, and quality of medical services have become pressing issues in Mongolia. The mortality rate from cancer in Mongolia is 24 percent, which is considerably higher than the global average of 17 percent. Additionally, about 70 percent of cancer patients are diagnosed at later stages of the disease.

It is crucial to improve the early detection, reduce cancer-related deaths, and ensure that citizens can access medical services within their local areas. To improve cancer treatment services in the aimags, funding for the necessary medical equipment and infrastructure has been included in the local budgets.

TJTB LLC, a company listed on the Mongolian Stock Exchange, has introduced the “Green Recycle” Green Bond for public offering.

The primary market trading orders for the second tranche of the green bond will be accepted through the IPO system of the Mongolian Stock Exchange on December 20-26, 2024.

Bond Overview:

Name: "Green Recycle" Bond

Number of Bonds: Up to 40,000

Nominal Price: USD 100

Total Value: USD 4,000,000 (Four million US dollars)

Annual Interest Rate: 10.0%

Bond Term: 36 months

Interest Payment Frequency: Semi-annually

Repayment Method: At maturity

Custody and Settlement: Central Securities Depository

By issuing this bond, the company aims to raise funds for its "TML Plastic" Recycle Plant, which specializes in recycling plastic bottles and products.

Baganuur 50 MW Battery Storage Power Station has been completed and commissioned in Baganuur District, Ulaanbaatar city, supplying energy to the Central System.

This will allow the provision of electricity to approximately 25,000 households. The construction contract for the Plant was signed in September 2024, and on-site work began on September 15, 2024.

N. Batsaikhan, Deputy Director of "Monhorus International" LLC and Project Director of the Baganuur Battery Storage Power Station, said, "From the first of this month, we conducted testing and adjustments of the battery. On December 6, 2024, we began supplying energy to the central system for the first time. Initially, Blocks 1 and 2 supplied 25-30 MW of power, and then Blocks 3 and 4 were commissioned, bringing the total output to 40-50 MW supplied to the central system. To date, the Plant has delivered energy to the central system at full capacity twice, and over 12 days, it has supplied 1,800 MWh of electricity. When the Station operates at full capacity, it can provide electricity to around 25,000 households.”

J. Chen, an authorized representative of "Envision Energy" LLC, remarked, "Our company supplied 27 battery packages for the Baganuur Battery Storage Power Station. Each package consists of two parts. The Plant has the unique capability to charge during low-consumption nighttime hours and supply electricity during high-demand evening hours. This makes the Plant a clean green technology that does not emit carbon dioxide, serving as a renewable energy source. We aim at supplying higher-capacity battery storage plants and wind power plants in the future."

S. Khurelsukh, Executive Director of "Ulaanbaatar Energy" LLC, noted, "The testing and adjustments of the Plant have been completed, and the Plant is now operating at full capacity. During this period, no faults or interruptions have occurred in the equipment. Mongolian engineers actively participated in the Project and are now fully prepared to manage the Plant independently." as reported by the Public Relations and Communication Department of the Governor's Office of the Capital City.

At today’s regular cabinet meeting (December 18, 2024), the Government discussed the adjustment of pension amounts in accordance with the Law on Pensions Provided by the Social Insurance Fund. According to the law, "The amount of pension for retirees shall be increased starting from January 1 of each year, in line with the average annual inflation rate of the previous year."

In line with this, the Government issued a resolution to increase the pension amounts and update the minimum pension thresholds. Under this resolution, the pensions provided through the Social Insurance Fund, as well as military pensions, will be increased by six percent. The Minister of Labor and Social Protection, L. Enkh-Amgalan, has been tasked with implementing this resolution within the approved budget framework.

Furthermore, the minimum amount for full pensions provided by the Social Insurance Fund and military pensions has been set at MNT 689,000 (six hundred eighty-nine thousand), while the minimum amount for proportional pensions provided by the Social Insurance Fund has been set at MNT 572,400 (five hundred seventy-two thousand four hundred).

This resolution will take effect starting January 1, 2025. To facilitate the six percent pension increase, a budget of MNT 297.4 billion has been allocated under the Social Insurance Fund's budget for 2025.

Translated by ChatGPT

Mongolia’s Prime Minister Oyun-Erdene Luvsannamsrain has praised Bahrain’s economic transformation and called for stronger ties between the two nations following his landmark visit to the kingdom earlier this month.

Speaking exclusively to the GDN after his maiden trip, the Mongolian premier described Bahrain as a ‘hidden gem’ and highlighted the parallels between the two countries, despite their geographical differences.

“Although Mongolia is landlocked and Bahrain is an island nation, we share common challenges and opportunities. Bahrain’s ability to overcome its limitations and thrive as a financial and economic hub is truly inspiring,” said Mr Oyun-Erdene.

One of the key aspects of Bahrain’s success that struck the visiting delegation was its economic diversification. He praised Bahrain for reducing its reliance on the oil sector, which now contributes just 15 per cent of the GDP.

“Bahrain has shown that a smaller population is not a barrier to development. Its transformation over the last 15-20 years is a model for countries like Mongolia, which is also rich in natural resources but is seeking to diversify its economy,” he added.

Mr Oyun-Erdene identified three critical areas for potential co-operation:

Finance: Mongolia plans to tap into Bahrain’s expertise as a regional financial hub, with proposals for reciprocal visits and knowledge-sharing initiatives in fintech and financial systems.

Mining: Bahrain’s resource management expertise could help Mongolia optimise the use of its vast critical mineral reserves.

National Security: Both countries are considering exchange programmes to develop strategies aligning national resources with global demand.

“Collaboration in these areas could set a precedent for innovative partnerships between nations with complementary strengths,” said the Mongolian Prime Minister.

Currently, Mongolia has diplomatic missions in the UAE, Kuwait and Egypt but none in Bahrain. However, the Prime Minister expressed interest in expanding Mongolia’s presence in the GCC.

“Bahrain can serve as a gateway to the Gulf for Mongolia, while Mongolia offers access to the massive markets of China and Russia. Strengthening our partnerships will create opportunities for trade, tourism and cultural exchange,” he said.

During his visit, Mr Oyun-Erdene met His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Prime Minister, Sustainable Development Minister and Bahrain Economic Development Board chief executive Noor Al Khulaif, Cabinet Affairs Minister Hamad Al Malki and Muharraq Governor Salman Isa bin Hindi.

Reflecting on his trip, the Mongolian leader described Bahrain as a ‘revelation’ and a country that deserves greater recognition.

“This visit wasn’t just about professional ties – it was personal. Bahrain’s charm and potential left a lasting impression,” he added.

He also dismissed earlier assumptions that a country needed a population of at least five million to thrive, citing Bahrain as a shining example of how vision and strategic planning can drive growth.

Reaffirming Mongolia’s open-door policy, Mr Oyun-Erdene extended an invitation to global investors to participate in the country’s development, particularly in the mining and energy sectors.

The Prime Minister also expressed interest in attending future editions of the Manama Dialogue, underscoring Mongolia’s commitment to strengthening its relationships on the global stage.

His visit to Bahrain was part of a broader initiative to boost ties with the Gulf, including his first-ever trip to Saudi Arabia. The two visits signal Mongolia’s intent to enhance co-operation with the region, particularly in areas of economic and strategic importance.

“This is just the beginning of our journey together. The potential for mutual growth between Mongolia and Bahrain is enormous, and I look forward to deepening this relationship in the years to come,” Mr Oyun-Erdene concluded.

The visit has set the stage for a promising partnership, with both nations drawing on each other’s strengths to create a shared path to progress.

Korea Medical Institute announced Wednesday that it has opened its first overseas medical check-up center, Family Medical Center with KMI, in Ulaanbaatar, Mongolia.

Located at the E-Mart Bayangol branch, the facility is a joint project between KMI and Mongolia’s Family Medical Center, aiming to improve access to health screenings for Mongolians while introducing advanced Korean medical services, KMI said.

The center offers a range of services, including national health screenings, corporate check-ups and individual medical assessments since its opening in September.

By integrating KMI’s specialized expertise with Mongolia’s healthcare needs, the center provides a tailored and differentiated experience for clients, according to the institute.

“Merging KMI’s specialized expertise with Mongolia’s distinct healthcare needs will provide a differentiated service for our clients,” a KMI official noted.

Mongolia implemented a mandatory national health screening program in May 2022 to encourage early disease detection and prevention, leading to growing demand for medical services. To support these efforts, the institute added that KMI and FMC will jointly operate the facility and collaborate on technology sharing and training programs for Mongolian medical professionals.

“Starting with the launch of the K-Health Check-up System in Mongolia, we will continue to strive for the expansion of Korea’s advanced medical systems to other countries,” said KMI’s Chief Strategy Officer, Lee Kwang Bae.

Established in 1985, KMI operates eight medical check-up centers in South Korea, including locations in Seoul, Busan and Jeju. It focuses on disease prevention and public health while engaging in various social contribution programs.

A Working Group, established to support the Government of Mongolia 2023 Resolution on building New Kharkhorum City in the Orkhon Valley, Uvurkhangai aimag, visited the Urban Planning Administration tasked with overseeing the city's development on December 17, 2024.

The Urban Planning Administration currently operates with 27 out of 30 positions filled. Its responsibilities include developing planning frameworks, legal regulations, infrastructure strategies, and investment policies to facilitate New Kharkhorum City's establishment. According to the Head of the Administration, N. Natsagdorj, foundational research has been completed, including potable water resource assessments, engineering geological and topographical surveys, environmental impact evaluations, and archaeological and paleontological studies.

In March 2024, an International Competition for the New Kharkhorum City Concept was announced to define the city's vision, development priorities, planning principles, and general design. A total of 426 teams from 54 countries registered, with 76 teams submitting proposals. From these, 36 proposals from 18 countries were shortlisted and are currently informing the city's planning process.

The Orkhon Valley is a historically significant place, home to the ancient capitals of the Hunnu Empire's Luut City, the Rouran's Mumo City, and the Uyghur's Khara Balgas, as well as the Great Mongol Empire's capital, Kharkhorum. Reflecting this heritage, the new city is planned as a cultural and tourism hub that will also focus on high-tech industries. It is designed to adhere to green development principles, creating a smart, eco-friendly environment. The city will cover 189,363 hectares, support a population of 500,000, and feature green spaces that make up 50 percent of residential areas.

The Working Group—established by a 2024 decree of Amarbayasgalan Dashzegve, Chairman of the State Great Khural of Mongolia, led by the Chairman of the Standing Committee on Security and Foreign Policy, G. Temuulen, and includes Members of the State Great Khural M. Enkhtsetseg, G. Luvsanjamts, D. Purevdavaa, B. Punsalma, and N. Batsumberel. During their visit, the Working Group reviewed the Administration's operations and the city's master plan. Additionally, the officials discussed the Draft Law on supporting the development and growth of New Kharkhorum City.