ÐÓ°ÉÂÛ̳

Over the past 30 years, Mongolia transformed itself into a vibrant democracy, slashed poverty, and tripled its GDP per capita, becoming an upper-middle income country in 2024. Throughout this period, the ÐÓ°ÉÂÛ̳ Group (WBG) accompanied Mongolia¡¯s recovery and development, remaining a steadfast partner of Mongolia through good times and bad.

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 by 5.0 percent in 2024, led by robust activity in the mining and services sectors, despite a sharp contraction in agriculture due to a severe winter (dzud). 

Despite heightened uncertainty stemming from major shifts in global trade policy, growth is projected to accelerate to 6.3 percent in 2025, largely driven by a 70 percent increase in copper production at Oyu Tolgoi and a gradual recovery in the agricultural sector. However, domestic demand is expected to soften. Inflation and weak rural income growth are anticipated to weigh on private consumption, while private investment is expected to decline due to lower foreign direct investment, higher interest rates, and rising energy and input costs. Although Mongolia¡¯s direct trade exposure to the U.S. is limited, global economic headwinds¡ªincluding lower coal and copper prices, slowing external demand, and substantial repayments from large mining projects¡ªare expected to put pressure on fiscal revenues and the external balance. Nonetheless, strong nominal GDP growth and inflation are projected to help reduce the public debt-to-GDP ratio.

Over the medium term, growth is projected to average 5.2 percent in 2026¨C27, supported by an ongoing recovery in agriculture, industrial expansion, rising household incomes, and continued public investment. Risks to the outlook are balanced. Key downside risks include weaker global growth and falling commodity prices resulting from global trade shifts and uncertainty. On the upside, faster progress on cross-border infrastructure, stronger-than-expected stimulus in China, or a quicker resolution of China¡¯s property market challenges would further support demand for Mongolia¡¯s exports.

Mongolia¡¯s national poverty headcount rate was 27.1 percent in 2022. In 2022, the national poverty line was estimated at 418,090 Mongolian tugrik per adult equivalent per month, a 40 percent increase (in 2022 Mongolian tugrik) over the previous poverty line, set in 2010. Under the ÐÓ°ÉÂÛ̳¡¯s lower-middle income class poverty line ($3.65 per day in 2017 purchasing power parity [PPP]), 2.4 percent of the population was estimated to be in poverty in 2022. The Prosperity Gap¡ªa new ÐÓ°ÉÂÛ̳ measure of shared prosperity that reveals the average factor by which welfare must increase for the population to reach a prosperity standard of $25 per day¡ªwas estimated at 2.8 for Mongolia. The Gini index was 31.4 in 2022.

Creating more and better jobs is critical in Mongolia. Labor market inclusion remains a challenge, especially for younger people and women. Mongolia will also need to continue to reduce poverty and ensure equal opportunities for all people in both urban and rural areas.

Last updated: April 2025

As of March 2025, the ÐÓ°ÉÂÛ̳ Group¡¯s portfolio in Mongolia included total commitments of $396.9 million (seven operations financed by the ÐÓ°ÉÂÛ̳ totalling $388.7 million and three trust fund operations totaling $8.2 million).

In 2021, the ÐÓ°ÉÂÛ̳ Group finalized its new Country Partnership Framework (CPF) for Mongolia. The strategy, which covers the period FY21¨C25, aimed 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 Performance and Learning Review of the CPF will be released in May 2025.

The CPF seeks to promote resilient recovery and inclusive and sustainable growth. It has three key 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 ÐÓ°ÉÂÛ̳ Group engagements. Based on the strong belief that economic development opportunities and climate actions are complementary in the long run, the ÐÓ°ÉÂÛ̳ Group will focus 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 ÐÓ°ÉÂÛ̳ Group¡¯s twin goals of eradicating poverty and boosting shared prosperity on a livable planet.

Last updated: April 2025

Mongolia became a member of the ÐÓ°ÉÂÛ̳ 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, sound management of the mining sector, environmental protection, and policy development. Over the last three decades, the ÐÓ°ÉÂÛ̳ provided over $1.5 billion in development financing to Mongolia. On July 1, 2020, Mongolia graduated from IDA, becoming an International Bank for Reconstruction and Development (IBRD)¨Conly client.

In addition to lending operations and grants, the Bank also provides analytical and advisory services to Mongolia to support its medium- and long-term development objectives and build the capacity for formulating and implementing strategic reforms.

Projects

The Bank is actively involved in Mongolia:

• The  seeks to improve climate-resilient connectivity and logistics efficiency for the meat value chain.
• The is developing a comprehensive framework for sustainable urban mobility, reduced congestion, and improved road safety.
• The  seeks to improve the usability and efficiency of online public services for citizens and businesses and to increase digital skills and digital-enabled jobs. 
• The Bank is also financing the , the , the , and the .

Several projects recently closed. They achieved significant results:

• The Mongolia COVID-19 Emergency Response and Health System Preparedness Project (2020-25) improved the emergency response to the COVID-19 pandemic and strengthened the preparedness of the health system by providing over 50,500 units of medical, laboratory, and other types equipment essential for the daily operation of hospitals and 75 ambulances. The project reached more than 330 soums (district within a province) of 21 aimags (administrative subdivision)and 9 district health facilities of Ulaanbaattar, providing COVID-19 vaccines for nearly half the population, building a new central vaccine storage facility and ensuring a functioning cold chain in all vaccination units nationally, and enhancing medical waste management in 295 soum hospitals.
• The  (2017¨C24) improved the reliability and sustainability of electricity services in Mongolia by rehabiliting distribution networks and financing the construction of a 10-megawatt solar power plant in Myangad, Khovd aimag. As a result of the project, the average interruption duration per year in the Baganuur Southeast Electricity Distribution Network project (BSEDN) area fell to 413 minutes, 234 minutes less than the target 647 minutes. In the Erdenet Bulgan Electricity Distribution Network (EBEDN) project area, the indicator reached 748 minutes, 212 minutes less than the target 960 minutes. Line losses dropped from 25.7 percent to 8.2 percent in the BSEDN area, and 105.5 gigawatt hours (GWh) of additional electricity were supplied to 133,517 households in the project area. The solar PV project generated 39.5 GWh of green electricity and reduced carbon dioxide emissions by about 35,500 tons since its commissioning in June 2022.
• The  (2017¨C23) supported policy and institutional reforms to enhance the export capabilities of small and medium-size enterprises (SMEs) in nonmining sectors and expand their access to export markets. It provided about $5 million to more than 200 SMEs to fund market research, product development, the purchase of equipment, efforts to meet International Organization for Standardization (ISO) standards, and other activities. Twenty meat-processing SMEs, tanneries, and textile companies benefited from intensive upgrading support that led to certification of their products. The project disbursded $1.5 million to 332 SMEs to help sustain employment during the COVID-19 pandemic, protecting 8,206 jobs.
• The  (2012¨C23) improved air quality and health in Ulaanbaatar by distributing 40,813 clean heating stoves, retrofitting 30 schools/kindergartens and 27 apartment buildings, and insulating 1,768 houses. By targeting low-income areas, it helped reduce povery and increase shared prosperity. The project created economic opportunities for the local manufacturing industry by supporting the local stove and boiler manufacturing industry, creating jobs, and boosting local businesses. It reduced energy costs by retrofitting and insulating buildings. Project-supported improvements in heating quality reduced gender gaps, as women are more affected by indoor air pollution than are men. The project also enhanced the government¡¯s capacity for air quality management by supplying and installing two air quality monitoring stations and training government officials to analyze and manage urban air quality.
• The  (2017¨C23), implemented by the Ministry of Finance, contributed to efforts by the government to strengthen fiscal and financial stability and improve the quality of expenditure management. The project set out to ensure that over the medium term, the budget would be developed based on strong macroeconomic analysis and robust analysis of public investment opportunities, informed by analysis of the performance of programs and possible fiscal risks. It also supported capacity building for social welfare to ensure that the social safety net was adequate and strengthened the finance sector.
• The  (SLP III, 2016¨C23) improved governance and community participation for the planning and delivery of priority local infrastructure investments in all 330 rural soums in Mongolia. Building on the two previous phases, the third phase helped support participatory approaches in rural development through the Local Development Fund (LDF), a key source of investment funding for aimags and soums. With the support of the project, the performance of soum governments in participatory planning and project implementation improved by more than 30 percent between 2015 and 2023, and citizens gained more voice in the selection of investments. The LDF provided $276 million in financing to more than 41,000 subprojects, directly benefiting 320,000 rural residents, and invested in strengthening the capacity of 32,000 civil servants.

Learn more about projects supported by the ÐÓ°ÉÂÛ̳ .

Analytical Reports

Several analytical reports include:

• (2024) presents a strategic vision for transforming Ulaanbaatar¡¯s sprawling ger (yurt) areas into more inclusive, resilient, and sustainable urban neighborhoods. It identifies challenges¡ªincluding inadequate infrastructure, poor housing quality, lack of access to basic services, environmental degradation, and limited economic opportunities¡ªand highlights the need for an integrated, area-based upgrading approach. Key recommendations include (a) strengthening land use planning and tenure security, (b) investing in green and resilient infrastructure, (c) promoting mixed-use and higher-density development, (d) enhancing local governance and community participation, and (e) enabling financing mechanisms such as land value capture and public-private partnerships. Together, these measures aim to improve living conditions while guiding the long-term, climate-resilient urban transformation of ger areas.
• The assesses the interconnections between Mongolia¡¯s development ambitions and climate change action and identifies ways to transition to a more economically diversified, inclusive, and resilient development path. It highlights key climate and transition risks affecting Mongolia¡¯s future development and presents a pathway for enhancing climate mitigation and adaptation. The report also makes a case for strengthening policies to enhance resilience to climate change and ensure a just transition, particularly for the most vulnerable.
• The Mongolia Gender Assessment (2024) provides a snapshot of gender equality in Mongolia, highlighting challenges that still need to be addressed. Since its transtition to a market economy, Mongolia has attained impressive health and education outcomes for women and girls. Remaining challenges include reverse gender gaps in life expectancy and university education; barriers to women¡¯s economic empowerment, participation, voice, and leadership; and gender-based violence. Gender vulnerabilities and opportunities related to climate change mitigation and the green transition need to be better understood and addressed.
• Agenda for Action: Key Policy Recommendations for Mongolia¡¯s Sustainable Development Vision (2024) covers a range of policy issues, highlighting challenges and providing actionable policy recommendations to the government of Mongolia formed in July 2024. The report presents eight policy notes to support the government¡¯s efforts to diversify and strengthen national assets beyond the mining sector to achieve the country¡¯s sustainable and green development objectives, outlined in Mongolia¡¯s Vision 2050 and the New Recovery Policy objectives.
• The projected that, after steady growth in 2024, Mongolia¡¯s economic expansion would accelerate in 2025, driven by increased OT mining production, which would more than offset weaker coal output. Robust domestic demand was expected to drive inflationary pressures and lead to moderate fiscal deficits and sizable current account deficits. The report described the medium-term growth outlook as favorable, supported by both mining and non-mining sectors, but noted that significant risks and challenges, including the potential for renewed fiscal and balance of payment pressures, persisted.
• The  (2023) finds that Mongolia has become more dependent on exports of extractives and imports for its development. Limited diversification has led to an economy prone to vulnerabilities and risks. Efforts to diversify exports need to address constraints emanating from (a) weak infrastructure; (b) customs delays; (c) the inability to meet international standards and weak enforcement of existing domestic standards; (d) limited digital infrastructure, regulation, and talent; and (e) underutilization of existing trade regimes. The report points to the rapid expansion of global digital trade as a possible opportunity for Mongolia to diversify its economy and bypass the logistical challenges of being landlocked. Specific areas identified include software development, business outsourcing, e-commerce, fintech, telemedicine, and edtech.
• The  (2022) presented evidence to inform policies that create more and better jobs in Mongolia while moving toward a more diversified economy. Sustained economic growth and increased labor productivity across the economy over the past two decades created better jobs for more people in the country. The overarching employment challenge Mongolia faces is to create more and better jobs than it did over the previous decade. Doing so calls for adopting a multisectoral jobs strategy that drives private sector development, upgrading the workforce¡¯s skills, increasing participation, and improving labor market functioning.
• The  (2022) report called for a new approach to business and investment climate reform and private sector development in Mongolia. It recommended strengthening the business-enabling environment to create a level-playing field and a more productive private sector beyond mining.

Learn more about analytical reports .

Development Policy Operations

The Bank supported two development policy operations in Mongolia since 2018:

• The  (2020) helped Mongolia consolidate the adjustment already achieved, address some long-standing structural weaknesses and distortions in the economy, and anchor macroeconomic policies going into an election year. It helped create fiscal space by substituting high-cost, short-term domestic borrowing with more concessional and long-term external assistance.
• The  (2018) was the first of three Development Policy Financing (DPF) operations in a programmatic series that supports the government¡¯s efforts to restore debt sustainability, strengthen the social protection system, and enhance competitiveness. Along with operations from other development partners, it supports a set of reform measures to stabilize Mongolia¡¯s economy and move it toward a sustainable development path.

Last updated: April 2025