Prime Minister N.Uchral presented a 2027 draft budget projecting 41.3 trillion MNT in revenue against 43.6 trillion MNT in expenditure, a deficit of 2.306 trillion MNT, after he submitted the draft budget framework statement, the 2028 and 2029 budget projection law and other related bills to Speaker of Parliament S.Byambatsogt on August 31.
Balanced budget revenue is determined by calculating the balanced price of major mineral resources based on projections from international financial information institutions, in line with core macroeconomic indicators and export prospects. The balanced consolidated budget balance is capped at a deficit or surplus of no more than two percent of gross domestic product, while the growth rate of total consolidated budget expenditure is calculated as not exceeding the higher of the current year’s non-mineral GDP growth rate or the average non-mineral GDP growth rate of the previous 12 consecutive years, keeping expenditure planning tied to underlying economic growth. For 2027, the maximum amount of consolidated budget expenditure will be increased by the amount of increased revenue, and this special requirement will not apply in 2027, nor will the special budget requirements apply in 2028 and 2029.
N.Uchral announced that dividends from Oyu Tolgoi will reach Mongolian citizens for the first time, ending what he called a 20-year unresolved conversation over the mine’s payouts. Funds will be deposited into individual citizen savings accounts rather than channelled through a ministry budget, with citizens deciding the use of the money through a public poll conducted via E-Mongolia. Proposed uses include a new thermal power plant, a leather processing and veterinary vaccine factory, and the renovation of two ports.
The government also plans to convert Erdenes Tavantolgoi’s 1,072 shares into transferable property that citizens can sell, gift, or pass to their children, and to list the company publicly, setting a standard for other state-owned companies to join the stock exchange. Shares in 10 state-owned companies requiring new technology development will be offered to global investors in line with global standards, targeting 500 million USD in foreign investment. The 3.5 trillion MNT accumulated by state-owned companies such as Erdenes Tavantolgoi through project and program implementation will support private sector growth and employment, while dividends collected from state-owned enterprises will reduce the tax burden on small and medium-sized businesses, helping them maintain jobs, expand, grow and start new ventures.
Salaried workers earning up to 792,000 MNT a month will be exempt from value-added tax, keeping an estimated 840 billion MNT in workers’ accounts. Companies with annual sales up to 2.5 billion MNT will pay corporate income tax of just one percent, while the VAT registration threshold rises to between 50 million and 400 million MNT, freeing an estimated 23,000 companies from monthly VAT filing. Enterprise tax rates will fall to 15 percent, reducing the tax burden for more than 600 companies.
The average pension will rise to 1,335,400 MNT next year. Premier N.Uchral explained that the pension gap affecting 141,000 senior citizens will be eliminated from January 1, 2027, with those who paid contributions for longer years receiving higher pensions. A new guaranteed pension of 100,000 to 300,000 MNT for the elderly takes effect from November 1, 2026.
Teachers received a 50 percent salary increase this year and doctors a 30 percent increase, with doctors set for a further 20 percent rise from November, bringing them equal treatment. Civil servants in culture, sport, agriculture and climate protection will see salaries rise by 50 percent, and all civil servant salaries will be adjusted for inflation by the first quarter of 2027. Working students will also be exempt from VAT.
On housing, 16,000 households will receive apartments: 14,000 families will move into new units under six percent mortgage loans, while 2,000 apartments will be offered on a rent-to-own basis. The down payment on 4,000 state-built apartments will be halved, from 30 percent to 15 percent.
The budget also funds a sixth thermal power plant with 300 megawatts of capacity, to be built alongside the third thermal power plant, which N.Uchral said will finally be commissioned along with 10 provincial-level plants that have stalled for years. Energy price increases will not be passed on to households, he shared. Moreover, 10 additional solar stations will be built through public-private partnerships next year, adding to five provinces where construction is already underway, alongside 500 charging stations for electric vehicles spaced roughly every 150 kilometres along major roads. Solar panels, solar collectors and other renewable energy equipment will be exempt from customs and excise duties.
In education, each of the nation’s six regions will gain two schools running the Cambridge program and one specialised high school, along with 15 new dormitories offering 300 beds. Around 100,000 students will receive personal computers next year, 100 schools will be converted into computer laboratory schools, and another 100 will become energy-efficient green schools without boilers.
On healthcare, 34 additional hospitals will be built with foreign loans from the state and local budgets, on top of 39 already under construction. The list of subsidised medicines will expand to cover daily essential drugs, and senior citizens will receive blood pressure, heart disease and diabetes medication free of charge.
Government debt is projected to remain below 50 percent of GDP in 2027 and 2028, falling to 45 percent in 2029, within the 60 percent limit set by Article 6 of the Law on Fiscal Stability for 2028.
