The fall session of the parliament officially opened on September 15, launching with a restructured legislative agenda, fiscal discussions, and renewed focus on key reforms.

Opening the session, Speaker of Parliament D.Amarbayasgalan congratulated lawmakers on the 35th anniversary of Mongolia’s permanent parliamentary system, which also coincided with the International Day of Democracy. In his remarks, he emphasized the evolving role of parliament in strengthening democracy, while introducing notable changes to parliamentary operations.

Among the structural reforms, the Standing Committee system has been overhauled, reducing the number of committees from 11 to eight to improve efficiency and member participation. This marks the first session to be held under the newly amended timetable, following revisions to the Law on the Parliament last spring. As a result, the fall session now begins two weeks earlier on September 15 and must last at least 75 working days, compared to previous years.

One of the first major agenda items discussed was the draft Law on the State Budget for 2026, alongside related legislation including the 2026 Budget Framework Statement, the 2027–2028 Medium-Term Budget Forecast, and proposals for the Sovereign Wealth Fund, Social Insurance Fund, and Health Insurance Fund.

During the session, Auditor General S.Magnaisuren presented the audit report on the proposed 2026 budget, identifying several key issues. He raised concerns about the simultaneous submission of amendments to the 2026 Budget Framework and the 2027–2028 budget forecast, stating that this practice undermines budgetary discipline and weakens the principles of medium-term fiscal planning. The auditor general emphasized the need for greater transparency, better coordination among government agencies, and alignment with national development goals.

Additional concerns included a lack of clarity in funding strategies, inconsistent data and estimates across sectors, and poor linkage between public spending programs and national strategic plans. According to the audit report, these weaknesses reduce the impact of fiscal policies and jeopardize the implementation of development legislation. Despite this, the draft budget was found to comply with requirements of the Law on Budget Stability and was deemed consistent with the long-term goals outlined in Vision 2050, the National Security Concept, and the Government’s 2024–2028 Action Plan.

Speaker D.Amarbayasgalan also urged lawmakers to re-examine Mongolia’s education system and budget, calling it a national priority for long-term development. He noted that despite public demand for increased funding particularly in education and health, the 2026 budget carries a deficit of 1.3 trillion MNT and proposes no increase in education financing compared to the previous year. He warned that the current social insurance system is outdated, imposing heavy burdens on both workers and businesses, and stifling growth. He called for urgent legislative reforms to reduce tax pressure, support private enterprise, and shift away from dependence on state-run sectors.

In the political arena, party groups held closed-door meetings as the session began. The Democratic Party (DP) caucus group, led by O.Tsogtgerel, proposed the formation of a temporary committee to investigate the legality of land ownership and acquisition permits issued in Ulaanbaatar since 1992. DP lawmakers argue that the capital’s traffic congestion and air pollution are deeply linked to land allocation and related corruption. A draft resolution for an oversight hearing was prepared and signed by 37 DP members, surpassing the 32-member threshold required for submission.

DP representatives also addressed the draft 2026 budget and established a working group to review it in depth. Discussions are ongoing about potentially introducing a Draft Law on Economic Freedom aimed at supporting citizens and entrepreneurs, as well as redirecting state support toward private sector development. Meanwhile, the first round of parliamentary questioning of the government, a new format introduced in the last session, has been scheduled for September 26, with discussions underway regarding which issues will be prioritized.

Responding to speculation about a possible DP–MPP coalition, D.Tsogtgerel clarified that no such talks are taking place. “The MPP’s central governing body has formally ruled out cooperation with the DP,” he said, denying rumors that his party was promised the Speaker's seat.

Looking ahead, the government’s basic directions for Development for 2026–2030 is expected to be submitted to parliament next month. This strategic document will lay out Mongolia’s mid-term development roadmap and includes comprehensive policies related to the aging population, education, health care, and economic modernization.

Economist urges diversification 

As the Fiscal Stability Council presented its assessment of the 2026 state budget proposal, economist N.Enkhbayar delivered a message: Mongolia must reduce its overreliance on coal and copper exports and urgently pursue a more diversified, stable economy.

Speaking at the briefing, N.Enkhbayar emphasized that global market dynamics are no longer governed solely by economic logic, but by increasingly complex political and geopolitical forces. He warned that for a country like Mongolia, largely dependent on raw material exports, trying to forecast market behavior is both difficult and risky. “It’s time we stop assuming mineral prices will always rise. Instead, we need to stabilize our economy and diversify revenue sources,” N.Enkhbayar said.

According to him, recent volatility in coal and copper prices, two of Mongolia’s top export commodities, has already caused substantial losses. Politicians, he added, have made the mistake of overestimating revenue potential and building excessively ambitious budgets, believing that high commodity prices were sustainable.

“The issue is that once government spending increases, it's politically and socially difficult to reduce it,” Enkhbayar noted. “We can’t easily cut salaries, pensions, or essential expenditures without major consequences. The only area we can realistically trim is construction and equipment.”

He stressed that Mongolia is only now coming to terms with the real risks of budget volatility, which led to the creation of the Fiscal Stability Law and the Fiscal Stability Council, mechanisms designed to enforce long-term budgetary discipline.

To ensure economic resilience, N.Enkhbayar urged the government to diversify revenue streams, arguing that Mongolia’s dependence on just one or two raw materials makes economic forecasting nearly impossible. He pointed to the unpredictable nature of coal exports, which are not only affected by global demand but also supply chain constraints and infrastructure delays.

“We still can’t be sure how much coking coal China will buy, or from which country. Even if demand exists, buyers could shift to Australia or Russia instead of us,” he said. “And with our infrastructure projects only expected to be completed by 2028, we remain logistically constrained.”

N.Enkhbayar also drew attention to China’s changing industrial policy, citing a plan launched in August 2025 involving five ministries and the National Reform Commission, which aims to stabilize the country’s steel industry, a move that could drastically reduce demand for coking coal and iron ore.

“Coking coal is used for steelmaking, and if China tightens output or restructures the sector, our exports could take a hit,” he explained. “The era of depending solely on coal is ending.”

As a path forward, he recommended greater investment in the processing and export of alternative resources, including copper smelting, rare earth elements, and uranium, which offer more potential for value-added exports and reduced economic volatility.