Mongolia: Economic Outline

Economic Indicators

Over the last 25 years, Mongolia has become a vibrant democracy, with a per capita GDP tripling, an increase in school enrollment, and a dramatic decline in maternal and child mortality. Despite the current context, with its vast agricultural and mineral resources and an increasingly educated population, Mongolia's long-term development prospects are promising. Despite a significant decline in agricultural output due to adverse weather conditions, the economy achieved strong growth of 7.1% in 2023. This growth was primarily fueled by coal mining and related transportation services, with coal exports reaching unprecedented levels, surging by 91% compared to the pre-pandemic 2018-2019 average. In 2024, economic growth is expected to remain robust but moderate compared to the previous year, reaching 4.8%. This moderation is mainly due to a notable decline in the agriculture sector resulting from the dzud weather phenomenon, characterized by extreme cold and heavy snowfall. However, growth in the services and mining sectors is projected to continue, albeit at a slower pace (World Bank).

The fiscal balance achieved a surplus of 2.6% of GDP, fueled by strong revenue collection from rising coal exports and a flourishing economy. Consequently, public debt decreased to 44.1% of GDP by the end of 2023 (excluding the Bank of Mongolia's swap agreement with the People's Bank of China). Deficits in the fiscal and current account balances are projected to reemerge in 2024. This is anticipated as coal exports normalize, export commodity prices decline, elevated government spending persists, and demand for imports increases. Headline inflation dropped to 7.9% year-on-year in December 2023, down from 16.9% in June 2022, boosting household purchasing power and incomes. This decline was driven by slower inflation in imported goods, attributed to easing supply bottlenecks, transportation costs, international energy and food prices, and exchange rate depreciation. Fiscal expansion and increasing household incomes are anticipated to fuel inflationary pressures in 2024. The supply-side shock resulting from the anticipated agricultural contraction is expected to elevate domestic food inflation, pushing average headline inflation to 8.5% in the outlook, slightly exceeding the central bank's upper target of 8% (data World Bank).

Although the unemployment rate decreased to 5.4% in 2023 (from 6.2% one year earlier), the labor market continues to lag behind the pre-pandemic period, characterized by modest employment growth and a reduced labor participation rate. With increasing wages and pensions, the poverty rate, measured at the lower-middle-income poverty line, is expected to decrease from 2.1% in 2023 to 1.9% in 2024. Poverty reduction was unequal as rural areas benefited more than urban areas amid higher livestock prices and stagnant wage growth in cities. The World Bank estimated the country’s GDP per capita (PPP) at USD 14,260 in 2022.

Monetary Indicators	2020	2021	2022	2023	2024
Mongolian Tugrik (MNT) - Average Annual Exchange Rate For 1 GBP	3,606.78	3,918.89	3,871.16	4,307.73	4,332.72

Source: World Bank - Latest available data.

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Latest Update: November 2025