The World Bank has published its latest Mongolia Economic Update, projecting GDP growth of 5.0% in 2026 as mining and agricultural output normalises after a strong 2025, while highlighting increased uncertainty in the outlook. The update notes that the economy grew 6.9% in 2025 despite trade disruptions and elevated geopolitical tensions. Growth in 2025 was supported by a rebound in agriculture and solid mining output, including copper production at Oyu Tolgoi, offsetting weaker coal activity, with construction and manufacturing strong while trade and services moderated. Inflation rose to an average of 8.6% in 2025 from 6.8% in 2024, reflecting strong consumer spending alongside higher food and energy prices; medium-term growth is projected to average about 5.5% in 2027–28, supported by large infrastructure projects and sustained domestic demand. Downside risks cited include global trade uncertainty and a prolonged Middle East conflict that could weaken external demand and disrupt mineral exports, as well as domestically driven pressures from stronger-than-expected fiscal spending that could widen external imbalances and raise inflation. The report emphasises protecting macroeconomic stability and vulnerable households while advancing diversification and competitiveness, including addressing infrastructure gaps, developing critical minerals, and strengthening disaster preparedness and climate resilience. A special chapter examines how firm and worker clustering in Ulaanbaatar can raise productivity, while warning that growing urban congestion could constrain these gains and pointing to the need to improve urban efficiency and support more balanced spatial development.

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