According to the latest data released by the National Statistics Office, the country’s inflation rate rose sharply in May, reaching 8.3 percent, a notable increase from 5.1 percent a year earlier. The spike, which marks a 3.2 percentage point jump from the previous month, has been driven by rising prices across essential goods and services, with food, fuel and housing costs taking the lead.
Over the first five months of 2025, consumer goods and services saw widespread increases, with the overall cost of goods climbing by 8.3 percent and services rising slightly by 0.2 percent compared to the previous month. In Ulaanbaatar, service prices experienced a particularly dramatic surge of 18.8 percent during the same period, while non-food items increased by 10.9 percent. Meanwhile, the western region of the country faced a 6.4 percent rise in overall goods prices and a 6.6 percent increase in food costs.
The latest inflation data reveals a complex interplay of both domestic and international pressures. Imported goods, excluding gasoline and fuel, contributed 2.5 percentage points to the overall inflation, accounting for nearly 30 percent of the total increase. At the same time, domestic goods, not including meat and solid fuels, were responsible for 5.1 percentage points, or more than 60 percent of the inflationary pressure.
Much of the rise in consumer prices has been fueled by basic necessities. The cost of food, beverages and water rose by 5.6 percent in May alone, with alcoholic beverages seeing a sharp increase of 12.5 percent. Housing, utilities, electricity and fuel became significantly more expensive, registering a 21.5 percent increase. Prices for household goods rose by 6.7 percent, while the hospitality and education sectors saw increases of 14 percent and 18.2 percent, respectively.
Even modest monthly inflation, just 0.2 percent in May compared to April, was primarily due to rising costs in food and clothing. Within food categories, meat and meat products recorded an 8.3 percent increase in the first five months of 2025. The price of beef rose by 7.4 percent, while the prices of sheep and goat meat matched the overall increase at 8.3 percent. Bread, flour and rice also saw notable rises, led by a 5.8 percent increase in bread and pastries and a staggering 19.4 percent jump in noodle prices.
In Ulaanbaatar, the average price of one kilogram of beef reached 12,379 MNT in May. This represented a 13.4 percent increase from May 2023, a 9.2 percent rise from May 2024, and a two percent increase from the previous month. Grade one beef was priced at 12,255 MNT, marking a 1.2 percent rise from April. Fuel prices also edged upward, with one liter of AI-92 gasoline reaching 2,439 MNT, up two percent from both the previous month and year.
The national inflation outlook for the first half of 2025 remains high, with the continued rise expected to be shaped largely by food, housing, water, electricity and fuel costs. Among these, the food, beverage, and water categories alone are contributing 1.6 percentage points to inflation, while housing and utilities add a further two percentage points. Of the 430 types of goods and services included in the consumer basket, 238 are imported, highlighting the country’s vulnerability to global price trends.
