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Economy

Mongolia's mid-year budget spends the money its provinces never did

The government has asked parliament to raise this year's spending ceiling by ₮998 billion ($277 million), all of it unspent balances sitting in provincial accounts, and says it has saved ₮1.4 trillion elsewhere to pay wages, pensions and energy relief. The deficit it amends had already doubled by July.

Mongolia's mid-year budget spends the money its provinces never did

Prime Minister Nyam-Osoryn Uchral handed the five-law package to the Khural on 20 August. The core move reads as bookkeeping: provinces have accumulated ₮2.8 trillion ($780 million) of prior-year carryovers, ₮2.3 trillion of it added in 3 years, and the amendment opens the right to spend ₮998 billion of that pile now.

Carryover money is already collected, so unlocking it borrows nothing. It still lands on the printed ledger: total expenditure and the deficit line rise by the same ₮998 billion, on a budget that stood ₮2.2 trillion ($610 million) in deficit by July, double the approved figure, with revenue at ₮17.3 trillion against ₮19.5 trillion of spending.

The other number in the package is a claim: ₮1.4 trillion ($390 million) of savings, "the state tightens its belt" in the government's phrase, redirected at the year's pressure points. Education wage gaps take ₮674.5 billion; pensions rise from November for ₮196.3 billion; food and fuel reserves get ₮150 billion; household energy relief ₮107.3 billion; grid maintenance ₮92.7 billion; health salaries go up 20% from November for ₮90 billion; pay rises in culture, sport and state services take ₮80.1 billion, and a school-construction programme ₮50 billion.

Summed, the redirect list comes to ₮1,440.9 billion. The savings figure is the allocation figure: in the coverage of the submission, the savings side is asserted, never itemised.

The provinces underspent while the capital queued for petrol.

The pressure points are the year's crisis ledger. AI-92 petrol at ₮3,040 a litre after August's rise; a Price Council that has not met; rationing lifted only in mid-August; July inflation at 13% with food at 25.5%; a central bank that hiked to 12.5% at an extraordinary meeting on 12 August. The wage lines start in November, 2 months before the minimum wage jumps to ₮1 million nationally in January.

A budget amendment that finances wages out of idle provincial balances is a statement about where the money still is. The provinces underspent while the capital queued for petrol.

Provincial capacity got a separate vote of confidence the same week. On Friday the Asian Development Bank approved a $225 million loan, calling it its largest health-sector investment in the country, to modernise 19 provincial hospitals, build a 300-bed hospital in Uvurkhangai and refit 11 district health centres along highways and border crossings, with telemedicine links to Ulaanbaatar and a reach the bank puts at more than half the provincial population by 2031.

What changes next is a date. The Khural has not scheduled readings, its Monday feed carried a speedway inquiry and a data bill, and every November start in the package depends on an autumn vote. The bill for the fuel year is now written down; passing it is the season's first test.