Mongolia

Mongolia’s economy continues to perform well, supported by a mining-driven recovery that has strengthened public finances and reduced public debt. Real GDP grew 5.0 percent in 2024, led by robust activity in the mining and services sectors, despite a sharp contraction in agriculture caused by a severe winter (dzud).

Growth is projected to accelerate to 6.3 percent in 2025, thanks largely to a substantial increase in copper production at Oyu Tolgoi (OT) and a gradual recovery in the agricultural sector. Private consumption is anticipated to slow, reflecting rising inflation and a gradual recovery in rural livelihoods. Private investment growth is also expected to soften due to declining FDI—partly from the tapering of OT-related investment and heightened global uncertainty— along with higher domestic lending rates as the central bank continues efforts to contain inflation, and rising production costs, particularly energy.

While the direct impact of recent trade policy shifts is expected to be limited—given Mongolia’s minimal trade exposure to the U.S.—the indirect effects of slowing global growth, declining coal prices, and substantial repayments from large mining projects are expected to put pressure on fiscal revenues and the external balance. Strong nominal GDP growth and inflation are nonetheless projected to help reduce the public debt-to-GDP ratio.

Over the medium term, annual GDP growth is projected to average 5.2 percent in 2026 and 2027, supported by an ongoing recovery in agriculture, industrial expansion, rising household incomes, and continued public investment. Key risks include weaker global growth and falling commodity prices resulting from global trade shifts and uncertainty. Faster progress on cross-border infrastructure, a stronger-than-expected stimulus in China, and a quicker resolution of China’s property market challenges would further support demand for Mongolia’s exports.

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Mongolia became a member of the World Bank in February 1991, when it began receiving support from the International Development Association (IDA) in a range of areas, including transport, rural development, education, health, development of Ulaanbaatar, management of the mining sector, environmental protection, and policy development. Over the last three decades, the World Bank provided over $1.62 billion in development financing to Mongolia. On July 1, 2020, Mongolia graduated from IDA, becoming an International Bank for Reconstruction and Development (IBRD)–only client.

As of March 2025, the World Bank’s portfolio in Mongolia included total commitments of $396.9 million.

In addition to supporting development projects through lending and grants, the World Bank provides analytical and advisory services to Mongolia to support its medium- and long-term development objectives while building capacity for formulating and implementing strategic reforms.

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In 2021, the World Bank Group finalized its new Country Partnership Framework (CPF) for Mongolia. The strategy, which covers FY21–27, aims to help Mongolia weather the COVID-19 crisis in the short term while working toward a more sustainable, inclusive, and resilient recovery over the longer term, with a focus on job creation and climate resilience.

The CPF seeks to promote resilient recovery and inclusive and sustainable growth. It has three focus areas: strengthening economic governance, boosting competitiveness, and improving quality of life. It puts renewed emphasis on job creation and climate resilience, two cross-cutting themes that are now embedded in all World Bank Group engagements.

Based on the strong belief that economic development opportunities and climate actions are complementary in the long run, the World Bank Group is focusing on creating more and better jobs for Mongolians, especially youth and women, and improving climate resilience for future generations. The strategy is anchored in Mongolia’s national development strategy (Vision 2050) as well as the government’s program and the World Bank Group’s twin goals of eradicating poverty and boosting shared prosperity on a livable planet.

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