Mongolia’s Economic Reckoning: The Decline of Coal
Mongolia’s Coal-Driven Economy Faces Challenges
Mongolia is experiencing significant challenges in its coal-driven economy. The recent downturn in early 2025 has been marked by declining coal revenues and a widening trade deficit, pointing to deeper structural issues within Mongolia and its primary export market, China. It is crucial to understand these dynamics in order to navigate the current economic landscape effectively.
The economic indicators paint a clear picture of the situation. GDP growth, which was a robust 7% in 2023, slowed down to 4.9% in 2024, reaching MNT 32.1 trillion (approximately 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 have dragged down the overall economic performance.
As Mongolia grapples with these challenges, it will be essential for policymakers, businesses, and investors to adapt and find innovative solutions to help steer the economy back on track. Collaboration with international partners and a focus on diversifying the economy beyond coal exports will be key in building a more resilient and sustainable economic future for Mongolia.
