Coal Decline Signals Mongolia's Economic Wake-Up Call

Mongolia's coal-driven economy is facing significant challenges. The downturn of early 2025, marked by declining coal revenues and a widening trade deficit, signals deeper structural issues within Mongolia and its primary export market, China. Understanding these dynamics is crucial for navigating the current economic landscape.

The economic indicators are clear. GDP growth, which stood at a robust 7% in 2023, slowed to 4.9% in 2024, reaching MNT 32.1 trillion (~ US$20 billion in 2025 prices). While the mining and services sectors provided some support, the impact of the dzud disaster on agriculture and the softening of global coal prices dragged down overall performance.

By January 2025, this deceleration had become more pronounced. Government revenues decreased by 36.7% year-on-year, with mineral royalty taxes, a critical component of the state budget, falling by 86.1%.