World Bank: Mongolia’s Economy Stays Resilient but Faces Rising Uncertainty

ULAANBAATAR, April 9, 2026 - Mongolia's economy is projected to grow at 5.0 percent in 2026, as mining and agricultural output normalizes following a strong 2025 performance, according to the latest Mongolia Economic Update.

Despite trade disruptions and elevated geopolitical tensions, Mongolia's economy expanded by 6.9 percent in 2025. Growth was driven by a strong rebound in agriculture and solid mining performance, particularly copper production at Oyu Tolgoi, a key national mine. These growth drivers helped offset weaker coal activity. Other sectors experienced mixed performance, with strong growth in construction and manufacturing, while trade and services moderated.

Strong export earnings and resilient household incomes kept consumer spending high. Combined with higher food and energy prices, these factors pushed inflation up from 6.8 percent average in 2024 to 8.6 percent in 2025. Over the medium term, growth is projected to average approximately 5.5 percent in 2027-28, supported by large infrastructure projects and sustained domestic demand.

Risks to the outlook are tilted to the downside. Globally, trade uncertainty and a prolonged Middle East conflict could weaken external demand, disrupt mineral exports, raise production costs and consumer prices, and slow growth. Domestically, stronger-than-expected fiscal spending could boost growth in the short-term but may widen external imbalances and increase inflation.

"Mongolia's growth remains solid, but uncertainty has risen," said World Bank Country Manager for Mongolia Taehyun Lee. "Protecting macroeconomic stability and vulnerable households from potential prolonged external shocks, while diversifying the economy and boosting its competitiveness, remain key pressing priorities."

The report highlights the importance of strengthening economic resilience and supporting diversification. It calls for addressing persistent infrastructure gaps and advancing critical mineral development to enhance competitiveness, alongside efforts to strengthen disaster preparedness and climate resilience. In this context, the report's special chapter examines how the clustering of firms and workers in Ulaanbaatar raises productivity and creates opportunities. It also shows, however, how growing urban congestion may limit these gains. This highlights the need to improve urban efficiency and promote more balanced spatial development across the country.