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Economy

Ulaanbaatar's 2027 budget suspends its own spending rule for a year

The government sent parliament a 2027 budget on Monday with 41.3 trillion tugriks of revenue, 43.6 trillion of spending and a 2.3 trillion deficit, and asked to switch off the spending ceiling of the Fiscal Stability Law for the year. The exemption is justified by one-off money: state-company and Oyu Tolgoi dividends, domestic securities and last year's carry-overs.

By CAW Staff2 September 2026
Ulaanbaatar's 2027 budget suspends its own spending rule for a year

Prime Minister Nyam-Osoryn Uchral and Finance Minister Z. Mendsaikhan handed the package to Speaker S. Byambatsogt on 31 August, together with amendments to the current year's budget. Revenue of 41.3 trillion tugriks is about $11.5 billion at the central bank's rate; spending of 43.6 trillion is about $12.1 billion; the deficit of 2.306 trillion, about $640 million, is kept inside the 2% of GDP limit the law allows in either direction.

The number that matters is the one the law would otherwise block. The Fiscal Stability Law ties spending growth to non-mineral GDP growth, or to the 12-year average of it, whichever is lower. For 2027 the government asks to suspend that ceiling, citing dividends from state enterprises and from the Oyu Tolgoi project, proceeds of domestic securities and unspent balances carried over. The suspension is written for 1 year only; the submission says the rule applies again in 2028 and 2029.

Debt moves the other way. The package caps nominal government debt at 50% of GDP in 2027 and 2028 and at 45% by 2029, below the 60% the law permits. A government that loosens the spending rule while tightening the debt rule is saying it expects cash, not credit, to fund the gap.

That cash has a source with a name. The submission itself lists the Oyu Tolgoi dividends, and the mid-year revision CAW reported on 24 August spent money the provinces had never managed to spend. A second revision now travels with the 2027 draft. Its figures were not in the release CAW read.

Whether parliament takes the package up early is the open question. The Speaker's Council was expected to decide on Tuesday on an extraordinary session for the budget; by the time this pack closed no decision had surfaced on Montsame, ikon.mn or gogo.mn, and the desk's queries are named in the SOURCES block. Nothing has been scheduled.

A government that loosens the spending rule while tightening the debt rule is saying it expects cash, not credit, to fund the gap.

Behind the budget sits the fuel bill. The August book closed 8.4% short on petrol, and the pump price the ministry publishes for regular AI-92 has not moved from 3,040 tugriks since mid-August. A budget that suspends its spending rule to fund a deficit of 2% is a budget that expects to keep paying for that.

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