On October 10, Parliament discussed the draft resolution on the approval of the Main Directions of the State Monetary Policy in 2026, submitted by Mongol Bank on September 30. Governor of the Central Bank B.Lkhagvasuren presented the proposal, outlining the nation’s economic performance and key monetary policy goals for the coming year.
According to the bank, the country’s economy has stabilized and grew by 5.6 percent in the first half of 2025. The agricultural sector, which recovered strongly after the severe zud of last winter, expanded by 35.6 percent and accounted for more than half of the total growth. Railway and housing construction have been active, resulting in a 25.2 percent increase in the construction sector, while the service sector grew by 4.5 percent, all contributing positively to overall economic expansion. The bank projects that the increase in copper mining and the continuation of new construction projects in the second half of the year will support growth, keeping the economy on a steady five to six percent path in 2025 and 2026.
Inflation, which declined from February to July this year, rose slightly in August due to higher domestic food prices. It may intensify in the coming months but is expected to gradually decline and enter the target range in 2026. Governor B.Lkhagvasuren emphasized the importance of implementing countercyclical fiscal policies to meet the inflation target and avoid imbalances in the economy. He noted that large construction projects should be financed mainly from external sources, warning that relying too heavily on domestic financing could increase inflationary pressures, affect the exchange rate, and disturb economic stability. He stressed that stabilizing the supply of basic goods and improving food production through technological solutions are essential for maintaining low and stable inflation and protecting citizens’ real incomes.
In terms of external trade, coal export revenue in the first eight months of this year was 2.7 billion USD lower than in the same period last year. As foreign trade slows and the current account deficit widens, inflows of foreign currency are being supported by loans and bonds from the government, banks, and the private sector. The Governor explained that the future outlook for the balance of payments will depend largely on global mineral prices, trading partners’ tariff policies, and the economic performance of major partners such as China. He warned that China’s economic growth is expected to slow further, creating a less favorable price environment for coal and iron ore. Therefore, it is essential to apply a balanced set of macroeconomic policies, reduce the current account deficit, and ensure that major construction projects do not place additional pressure on foreign exchange reserves.
B.Lkhagvasuren also pointed out that external risks remain high. Slowing global demand due to geopolitical tensions, falling prices of key export commodities, potential delays in oil supplies, severe winter weather and power shortages could negatively affect export revenues and increase inflation. Despite these risks, Mongol Bank expects inflation to stabilize within a range of six plus or minus two percentage points next year and to be reduced to five percent by 2027. The Governor stated that government support and countercyclical fiscal measures will be crucial for achieving this goal.
He also said that while Mongolia’s economy is on a stable growth path, sustaining that momentum will require prudent fiscal management, careful external borrowing and consistent policy coordination. The 2026 monetary policy aims to maintain economic stability, strengthen resilience against external shocks and create conditions for sustainable and inclusive growth.

Published Date:2025-10-14