AGP Executive Report

Trade & Revenue: Mongolia’s Customs General Administration says it collected MNT 5.7 trillion for the state budget in the first 10 months of 2026. Foreign trade turnover rose nearly 35% in the first nine months, with exports reaching USD 16.6 billion. Prices & Imports: September inflation climbed to 12.9% year on year, including a 46.9% jump in meat prices. Imports reached USD 9.7 billion in the first nine months; petroleum products made up 22.6%, as fuel and food purchases increased. Business Climate: Ulaanbaatar proposed halving taxes on restaurants, hotels, resorts, car washes and auto-service businesses to 1%, citing inflation and fuel shortages. Growth & Infrastructure: S&P affirmed Mongolia’s BB- rating with a stable outlook, pointing to exports and rising Oyu Tolgoi copper output. Construction of a 127-km railway to ease Ulaanbaatar congestion is advancing, with its first 87 km completed.

Public Finances: Customs collected MNT 5.7 trillion for the state budget in the first 10 months of 2026. Trade: Turnover rose 34.6% year on year to $25.9 billion in the first nine months, with a $6.5 billion surplus; mining made up nearly 90% of exports. Inflation: September’s annual rate reached 12.9%, with food prices up 20.8% and meat prices 46.9%. Fuel products accounted for 22.6% of imports. Credit Outlook: S&P affirmed Mongolia’s BB- rating with a stable outlook, citing mining-led growth but warning that social spending and major projects could strain public finances. Business Costs: Ulaanbaatar proposed halving taxes on six service sectors, including restaurants, hotels and car washes, to 1%. Infrastructure: The new 127-km railway to Khushig Valley is under construction, with its first 87 km complete. Fuel Market: A luxury resort escaped shortages that hit the wider country; it is linked to the family of a central figure in the $1.1 billion Lex Oil fraud scandal, whose business network reportedly controls a significant share of fuel imports.

Trade and Reserves: Mongolia’s foreign trade turnover rose 34.6% year on year to $25.9 billion in the first nine months, with a $6.5 billion surplus. Mining accounted for nearly 90% of exports; export revenue reached $16.6 billion and foreign-exchange reserves hit a record $8.9 billion. Inflation and Imports: Annual inflation climbed to 12.9% in September, including a 20.8% rise in food prices and a 46.9% jump in meat. Fuel made up 22.6% of imports, while gasoline and diesel purchases increased. Credit Outlook: S&P affirmed Mongolia’s BB- rating with a stable outlook, citing mining-led growth while warning that social spending and major projects could pressure public finances. Business Costs: Ulaanbaatar proposed halving taxes to 1% for restaurants, hotels, resorts, car washes and auto-service businesses. Infrastructure: The 127-kilometer Bagakhangai–Khushig Valley–Emeelt railway is under construction, with its first 87 kilometers completed; the line is intended to ease congestion and move hazardous cargo around the capital.

Prices and Trade: Mongolia’s annual inflation climbed to 12.9% in September, with food prices up 20.8% and meat prices 46.9%. Foreign trade rose 34.6% to $25.9 billion in the first nine months, producing a $6.5 billion surplus as mining made up nearly 90% of exports. Fuel and food imports also increased. Growth and Credit: Industrial output surged 56.3% in the first eight months, led by mining. S&P affirmed Mongolia’s BB- rating with a stable outlook, citing export-driven growth while warning that social spending and major projects could strain public finances. Business Costs: Ulaanbaatar proposed halving municipal taxes on restaurants, hotels, resorts, car washes and auto services to 1%, aiming to support businesses amid rising costs. Infrastructure: The first 87 kilometres of a 127-kilometre railway linking Bagakhangai, Khushig Valley and Emeelt are complete; the line is intended to ease congestion and move hazardous freight around central Ulaanbaatar. Carbon Markets: Singapore and Mongolia will begin accepting applications on October 30 for projects that could generate carbon credits under the Paris Agreement.

Credit Outlook: S&P affirmed Mongolia’s sovereign rating at BB- with a stable outlook, forecasting average annual growth of about 5.6% through 2029. It cited mining-led expansion but warned that social spending and major infrastructure projects could strain public finances. Industrial Growth: Output rose 56.3% in the first eight months to MNT49.9 trillion, driven by surging metal ore and coal extraction. Trade and Reserves: Export revenue reached US$16.6 billion, helping lift foreign-exchange reserves to a record US$8.9 billion. Investment and Carbon Markets: Mongolia is seeking US$5.5 billion in foreign investment and plans a 30-day complaint guarantee; Singapore and Mongolia will open applications on Oct. 30 for eligible carbon-credit projects. Fiscal Policy: Parliament is rewriting fiscal rules after the budget breached them, raising questions about spending discipline as revenues grow.

Exports and Reserves: Mongolia’s export revenue reached $16.6 billion in the first nine months, up 54% year on year, while foreign-exchange reserves stood at a record $8.9 billion. The government is also moving to ease congestion at the Gashuunsukhait border crossing and advance rail links and automated customs systems. Cross-Border Payments: Khan Bank is among the first UnionPay partners joining a network that will let customers use mobile wallets for QR payments at participating merchants in Japan. Investment Climate: Mongolia is targeting $5.5 billion in foreign investment and has announced a 30-day guarantee for resolving investor complaints. Tourism: Inbound arrivals have already exceeded Mongolia’s full-year 2025 total, with 841,506 visitors recorded in the first nine months. Fiscal Policy: Parliament has rewritten the fiscal rules after the budget breached them.

Exports and Reserves: Mongolia’s export revenue reached $16.6 billion in the first nine months, up 54% year on year, while foreign-exchange reserves hit a record $8.9 billion. Cashmere and wool exports rose 73% to $244 million, but meat exports fell 11%. Budget Pressure: The draft 2027 budget exceeds parliament’s spending ceiling by 19.4%, with debt payments set to outstrip capital investment and billions allocated to programs without measured outcomes. Payments and Investment: Khan Bank is among the first partners joining a UnionPay cross-border payments network, while Mongolia is seeking $5.5 billion in foreign investment and offering a 30-day guarantee to resolve investor complaints. Tourism: Foreign arrivals have passed 856,000, already exceeding last year’s total as the government pursues a one-million-visitor target.

Reserves & Exports: Mongolia’s foreign-exchange reserves hit a record $8.9 billion at September’s end, as nine-month export revenue rose 54% year on year to $16.6 billion. Tourism: The country welcomed 856,636 foreign visitors this year, already surpassing 2025’s full-year total and moving toward its one-million-visitor goal. Fiscal Policy: The draft 2027 budget exceeds parliament’s spending ceiling by 19.4%; lawmakers are considering rewriting the fiscal limits as auditors warn of rising debt and spending without measurable outcomes. Investment & Mining: Mongolia is targeting $5.5 billion in foreign investment and has proposed a 30-day complaint guarantee. Entrée Resources says transfer of licenses needed for Oyu Tolgoi’s next underground development remains tied to talks on state participation. Payments: Khan Bank is among the first partners joining a UnionPay cross-border network, enabling QR wallet payments at participating merchants in Japan. Growth Outlook: The EBRD raised its forecast for Mongolia, citing record mining output, while flagging fuel-supply disruptions as a regional risk.

Growth Outlook: The EBRD expects Central Asia to grow 5.8% in 2026 and 5.3% in 2027, revising Mongolia’s outlook upward on record mining output. Fuel disruptions, high energy costs and water scarcity remain risks. Corporate Accountability: South Korea fined battery-materials maker Kumyang 7.63 billion won over accounting fraud, including improperly consolidating its Mongolian unit and failing to recognize an impairment loss. Investment Drive: Mongolia is targeting $5.5 billion in annual foreign investment by 2028, with a proposed 30-day deadline for resolving investor complaints and incentives for projects above MNT100 billion. Mining Projects: Entrée Resources says talks continue over state participation in the area of its Shivee Tolgoi and Javkhlant licenses; transferring them to Oyu Tolgoi is required for Lift 1 underground development. Fuel Supply: Mongolia has contracted 78,000 tonnes of Russian fuel as shortages add pressure to the economy.

Mongolia Investment Promise: Mongolia says it will resolve investor complaints within 30 days, aiming to unlock $5.5B in annual foreign direct investment by 2028, with stabilization certificates and tax/customs relief for large investors. Mining & Licenses: Entrée Resources responded to questions from Mongolia’s parliament over transferring Shivee Tolgoi and Javkhlant mining licenses to Oyu Tolgoi LLC, saying the transfer depends on paying transfer tax and ongoing talks on state participation. Energy Output: TMK Energy reported a new monthly gas production record at its Gurvantes XXXV CSG project in South Gobi, with September output up 8% from August and rigs preparing to return. Transport Tech: Testing has started for Ulaanbaatar’s Yarmag–Kharkhorin cable car system, including safety checks, simulated outages, and staged cabin installation ahead of a planned passenger opening after approvals. Regional Health Watch: WHO and ECDC are monitoring a suspected pneumonic plague death in Russia’s Irkutsk region; Asian neighbors including Mongolia reportedly increased border vigilance. Trade/Logistics: India’s SAIL carried out its first air shipment trial of Mongolian coking coal to diversify supply routes.

Mongolia Energy & Infrastructure: Testing has started for Ulaanbaatar’s Yarmag–Kharkhorin Market cable car, with safety checks on cables, speed, brakes, sensors, and emergency scenarios; the system is set for passenger service after Bureau Veritas assessment and state approval. Fuel Security: Mongolia’s industry minister warned of tighter global supply after US diesel and China’s petroleum export bans, saying the government won’t sell fuel but is helping firms source AI-92 via multiple routes that still transit Russia or China. Agriculture & Food Supply: Mongolia has harvested most wheat and vegetables (wheat 70%, potatoes 90%) and plans transparent wheat purchases via the Agricultural Commodity Exchange. Environment & Forestry: The “Billions of Trees” autumn campaign continues in Ulaanbaatar, with 140 million trees planted/grown since 2021 and expanded pest-control surveys across millions of hectares. Regional Trade Link: India’s SAIL carried out its first air shipment trial of Mongolian coking coal (1 ton) to diversify supply. Global Business Watch: DeepSeek is reportedly close to raising $12B+ (up to ~$15B) ahead of a 2027 IPO, while Moonshot AI targets a Hong Kong listing after a $50B valuation round.

Fuel Crunch in Mongolia: Mongolia’s Industry and Mineral Resources Minister warned of tighter global diesel and petroleum supply after US diesel export bans and China’s Oct 1 petroleum export ban, pushing firms to source from multiple suppliers while still routing through Russia or China; AI-92 prices have risen and night-time fuel dispensing fines are being imposed. Food Harvest & Procurement: Mongolia reports 90% potato and 70% wheat harvest progress, with the state planning to buy 100,000 tonnes of wheat via the Agricultural Commodity Exchange and selecting storage for 13,000–14,000 tonnes of vegetables. Tree-Planting Drive: Under the “Billions of Trees” campaign, Mongolia says 140 million trees have been planted/grown so far, with 3,000 trees planted by 1,072 people in Ulaanbaatar on Oct 3 and pest-control surveys across 2.4 million hectares. Regional Trade Signals: Mongolia’s fuel contract news notes 78,000 tonnes of fuel from Russia, while broader regional coverage highlights Mongolia’s growing role in cross-border supply chains. Health Alert Spillover: Mongolia reportedly increased vigilance near Russia after a lab technician’s death in Siberia sparked quarantine and border health checks across several Asian countries.

Fuel & Food Security: Mongolia’s Industry Minister warned fuel availability is tightening as the US bans diesel exports and China moves to ban petroleum product exports, while Mongolia still needs AI-92 and must route imports via Russia or China; at the same time, farmers have harvested most wheat and vegetables (90% potatoes, 70% wheat) and the government will buy 100,000 tonnes of wheat via the Agricultural Commodity Exchange. Energy Trade: Mongolia’s coal position is rising as Russian coal shipments to China fell 10.8% in Jan–Aug 2026, with Mongolia’s imports up sharply. Environment & Jobs: Mongolia’s “Billions of Trees” drive continues, with 140 million trees planted since 2021 and an autumn campaign running through mid-October, alongside pest-control surveys across millions of hectares. Local Economy & Governance: President Khurelsukh’s regional visits highlighted growth (6.8%), reserves (USD 7bn), and progress on national programs, including healthcare upgrades in Khuvsgul. Diplomacy & Business Links: Mongolia and Australia held foreign ministry consultations covering trade, mining, energy, agriculture, tourism, and consular services.

Fuel & politics: Mongolia’s Democratic Party says fuel shortages have dragged on for three months and criticizes state-backed subsidized loans for fuel storage, arguing Mongolia already has capacity for about 45 days of consumption. Climate & land: Mongolia reports planting 140 million trees since 2021 under its “Billion Trees” push, with autumn campaigns and pest-control surveys across millions of hectares. Bilateral trade & energy: Mongolia and Kazakhstan reaffirm plans to boost trade fivefold and expand cooperation in energy, mining, agriculture, digitalization and transport, noting direct air service momentum. ADB finance: Mongolia signs ADB loan agreements for education and health projects, while ADB also signals up to $1.3bn financing by 2027. AI software race: DeepSeek and Huawei unveil an open-source toolkit for Huawei Ascend chips, aiming to reduce reliance on Nvidia’s CUDA and support large-scale Ascend deployments in Inner Mongolia. Oyu Tolgoi market control: Rio Tinto is reported to expand its metals trading desk in Singapore, a move that could help manage output after ownership changes—relevant to Mongolia’s mining outlook. Regional connectivity: Trans-Caspian sea freight hits 4.5m metric tons in seven months of 2026, underscoring faster Eurasian corridor growth.

Fuel & Subsidies: Mongolia’s DP criticized the government over a three-month fuel shortage and alleged misuse of state-backed support, including subsidized loans for fuel storage that critics say are costly and unnecessary given existing capacity. Bilateral Trade & Energy: Kazakhstan and Mongolia reaffirmed plans to expand cooperation and push bilateral trade fivefold, highlighting energy, mining, agriculture, and new air routes between capitals. Diplomacy: Mongolia and Australia held political consultations in Canberra, covering defense, trade, agriculture, mining, energy, education, tourism, and consular plans including a Mongolian consulate in Sydney. Climate & Land: Mongolia reported planting 140 million trees since 2021 under its “Billion Trees” campaign, with autumn drives and pest-control surveys across millions of hectares. Mining & Markets: Rio Tinto is reported to expand its metals trading desk in Singapore into third-party metal and derivatives—an approach that could reshape how miners manage offtake and ownership risk. Health Watch: Unconfirmed reports of pneumonic plague in Russia’s Irkutsk region triggered quarantine measures and contact monitoring, underscoring regional biosecurity concerns.

Mongolia–Kazakhstan Trade Push: Deputy PM Nomtoibayar met Kazakhstan’s agriculture minister and discussed shorter transport/logistics routes via Russia and China, plus crude oil sourcing; they also flagged a plan for a major western meat-processing plant for the halal market. Bilateral Commission Update: The 10th Mongolia–Kazakhstan intergovernmental commission in Astana set a 2025–2027 roadmap to lift trade to $500m and expanded cooperation across transport, logistics, mining, agriculture, IT, tourism, health and green development. CAREC Energy Forum: Mongolia hosted a CAREC ministerial conference in Ulaanbaatar with an energy investment forum on clean energy, transport/logistics and critical minerals, pitching Mongolia’s transition plans to regional investors. ADB Financing for Social Sectors: Mongolia signed ADB loan agreements for education and health projects, including new school and kindergarten construction and modernization of provincial hospitals and border-area health centers. Tourism Surge: Mongolia welcomed 841,506 international tourists by Sept 30, up 39.6% year-on-year, with Russia, China and South Korea leading arrivals. Clean Energy & Critical Minerals Angle: The week also highlighted regional momentum around energy and mining cooperation, including clean-energy investment themes tied to broader corridor development.