IMF Says Mongolia's Economy Held Up in 2025 Despite a Coal Price Slump, But Warns on Inflation and Fiscal Slippage

The International Monetary Fund's Executive Board wrapped up its annual health check of Mongolia's economy on August 6, 2026, and the overall message was better than feared, with a caution attached. Despite a sharp slide in global coal prices — Mongolia's most important export — the economy grew faster than expected in 2025, helped by a strong farming season and solid mining output. Growth stayed strong into 2026, with GDP up 7.8% year-over-year through April.

Inflation is the bigger worry. After several months of cooling, prices started rising again in March 2026, driven by higher meat and energy costs, and reached 12.0% year-over-year in June. The IMF expects inflation to stay elevated, around 10% by the end of the year, before gradually easing.

On the government's finances, the IMF's message was blunter: Mongolia needs to act soon. It urged the government to submit a supplementary budget to avoid a repeat of the cash shortages that hit at the end of 2025, and said a recently approved package of tax cuts should be reconsidered because of its hit to revenue from outside the mining sector.

The Fund said Mongolia's central bank should keep monetary policy tight — and be ready to tighten further — while also building up foreign currency reserves, which have grown but remain below levels the IMF considers adequate for an economy this exposed to swings in commodity prices.