The state consolidated budget ran a deficit of 2.2 trillion MNT in the first seven months of 2026, the widest gap in three years, according to preliminary execution figures released by the National Statistics Office (NSO) last week.
Total revenue and support reached 19.8 trillion MNT in the January to July period, up by 3.3 trillion MNT, or 19.6 percent, from the same period of 2025. Balanced revenue and support, which excludes one-off items, reached 17.3 trillion MNT, up by 11 percent. Total expenditure and net loan repayments came to 19.5 trillion MNT, leaving the budget in deficit. The seven-month period ran a 1.5 trillion MNT surplus in 2024 and a 1.2 trillion MNT deficit in 2025, meaning this year’s shortfall is nearly double last year’s.
Total tax revenue reached 16 trillion MNT in the first seven months, up by 1.5 trillion MNT, or 10.7 percent, from a year earlier. The increase was driven mainly by social insurance revenue, which rose by 479 billion MNT or 15.8 percent, value-added tax revenue, which increased by 12.1 percent, and income tax revenue, which surged by 9.8 percent. Excise tax revenue fell by 102.8 billion MNT or 16.2 percent.
Income tax made up 31.2 percent of total tax revenue in the seven-month period, followed by value-added tax at 23.3 percent, social insurance revenue at 22 percent, foreign operations revenue at seven percent, excise tax at 3.3 percent, and other taxes, fees and charges at 13.2 percent. Within income tax revenue, corporate income tax accounted for 63.8 percent and personal income tax, including refunds, accounted for 36.2 percent.
Consolidated state budget expenditure and net loan repayments totaled 19.5 trillion MNT in the first seven months, up by 2.6 trillion MNT or 15.5 percent, from the same period last year. The rise was driven mainly by goods and services expenditure, which increased by 18.3 percent, capital expenditure, which hiked by 31.8 percent and current transfers, which rose by eight percent.
Current transfers accounted for 38.5 percent of total expenditure, goods and services expenditure for 35.2 percent, capital expenditure for 18.4 percent, interest expenditure for 4.9 percent, and subsidies for 3.1 percent.
Capital expenditure alone reached 3.6 trillion MNT, up by 31.8 percent, from a year earlier. The increase came from construction costs, which surged by 33 percent, equipment costs, up by 36.5 percent, major repairs, up by 32.4 percent, and other capital costs, up by 20.2 percent.
