Fitch Ratings highlights the sharp decline in coal export revenues poses a key fiscal risk

According to Fitch Ratings, “Risks to public finances could be further heightened if the authorities opt to loosen fiscal policy in response to the recent bout of public protest.”

📊 Budget and Current Expenditures

As of April this year, current expenditures have increased by 20% compared to the same period last year.

Although Mongolia has set fiscal rules to cap:

• Current expenditures at 30% of GDP,
• Government debt at 60% of GDP, and
• Structural deficit at 2% of GDP,
  Fitch notes that the government's track record of enforcing these limits remains weak, casting uncertainty over the commitment to strict adherence.

🏗 Major Projects and Fiscal Deficit

While the government has expressed its intention to support 14 large-scale (mega) projects, these will require significant medium-term investment to be successfully financed.

Fitch Ratings estimates that if no fiscal adjustments are made in the face of declining commodity revenues in 2025, the overall budget deficit could widen to 3.0% of GDP.