AGP Executive Report

Mongolia Macro: Mongolia’s inflation hit 11.2% in May, driven mainly by higher imported goods prices plus meat and some domestic commodity costs, while the central bank targets about 5% from 2027. CAREC Connectivity: A CAREC Transport Sector Coordinating Committee meeting is underway in Ulaanbaatar, with Mongolia pushing its “Transit Mongolia” plan and discussing the CAREC Transport Strategy 2030 midterm review and 2026 activities. Construction & Housing Finance: Mongolia’s construction sector reached MNT 11.7 trillion in major works by end-2025 (about 3.5% of GDP), with draft revised construction laws and a proposed specialized housing bank in the pipeline. Food & Agriculture Risk: Foot-and-mouth disease preparedness has been raised indefinitely in Khovd after late-May confirmation, with bans on large gatherings and new quarantine measures also reported in Bayan-Ulgii and Dundgovi. Trade Facilitation: Kyrgyzstan chairs the UN ESCAP Paperless Trade Council for a third straight term, with Mongolia named deputy chair, aiming to speed cross-border document exchange. Energy & Trade Exposure: A separate analysis flags how Strait of Hormuz disruptions could ripple into inflation and industry, arguing for stronger energy security via renewables and diversified supply routes. Mining Investment: Orano has started construction at Mongolia’s uranium project in Dornogobi, marking a new phase of the strategic cooperation.

Inflation Watch: Mongolia’s CPI inflation hit 11.2% in May, up 2.9 points year-on-year, driven mainly by higher imported goods prices plus meat and some domestic commodity costs. Construction Push: Mongolia’s construction and major renovation works reached MNT 11.7 trillion by end-2025 (about 3.5% of GDP), with over 100,000 jobs created; new draft laws include a specialized housing bank and updated construction/urban development rules. Transit & Trade: Ulaanbaatar hosted the CAREC Transport Sector Coordinating Committee meeting, with Mongolia pushing its “Transit Mongolia” goal and discussing the CAREC Transport Strategy 2030 midterm review and logistics center operations. Agriculture Risk: Foot-and-mouth disease outbreaks have been confirmed in Khovd, Bayan-Ulgii and Dundgovi, triggering indefinite preparedness in Khovd, quarantine and vaccination, and bans on large gatherings. Energy & Industry: Orano has started construction for its Mongolia uranium project at Zuuvch Ovoo, signaling renewed momentum for uranium development in Dornogobi. Tourism Momentum: Mongolia’s foreign tourist arrivals rose 32% in the first five months of 2026 (292,063 visitors), with May alone up 26% to 84,035. Finance for Entrepreneurs: EBRD will provide XacBank up to $80m to back youth entrepreneurship, supported by EU insurance and consulting/training for digital and financial upgrades. Ulaanbaatar Culture: A Silk Road exhibition opened in Kharkhorin, running until Sept. 15, as part of the 820th anniversary commemorations. Regional Business Links: Mongolia’s “Go Mongolia” booth won “Best Booth” at Seoul’s SITF 2026, boosting visibility for nomadic culture and tourism products.

Mongolia Tourism Momentum: Mongolia welcomed 292,063 foreign tourists in the first five months of 2026 (+32% y/y), with May alone bringing 84,035 visitors (+26%), as the government pushes year-round travel under its “Years to Visit Mongolia” push to reach 1m arrivals annually. Youth Entrepreneurship Finance: The EBRD is providing XacBank up to $80m to back youth-led SMEs under its “Youth in Business” program, with EU-backed insurance and support for digital solutions and better financial management. Education Digital Shift: Mongolia’s Education Ministry is teaming up with Mozaik Education to introduce AI tools in schools and modernize textbooks with clearer visuals, interactive elements, and animated demonstrations. Health & Livestock Risk: Foot-and-mouth disease containment measures are tightening in Mongolia’s Khovd, Bayan-Ulgii, and Dundgovi provinces, including bans on large gatherings and vaccination/quarantine actions. Diplomacy & Trade Links: Mongolia continues expanding ties via new ambassador credentials (Belarus, Thailand) and ongoing parliamentary cooperation discussions, including with Israel.

Tourism Boost: Mongolia’s “Go Mongolia” booth won “Best Booth” at the Seoul International Travel Fair for the third time, highlighting nomadic culture and nature-led tourism. Tourism Demand: Foreign arrivals rose 32% in the first five months of 2026 to 292,063, with May alone bringing 84,035 visitors (+26% y/y). Youth Finance: The EBRD is lending XacBank up to $80m to back youth-led SMEs under its “Youth in Business” program, with EU-backed insurance and added digital/financial training. Education Tech: Mongolia’s education ministry is working with Mozaik Education to form a joint group to introduce AI tools in schools and modernize textbooks with more engaging visuals and interactive elements. Diplomacy & Trade Links: New Belarus and Thailand ambassadors presented credentials to President Khurelsukh, with talks on expanding economic cooperation and trade integration. Health & Livestock Risk: Foot-and-mouth disease was confirmed in Dundgovi, triggering quarantine, disinfection, vaccination, and similar restrictions in Khovd and Bayan-Ulgii. Energy/Mining Markets: Rio Tinto shares fell nearly 2% as iron ore prices softened, while the company points to production resilience including assets in Mongolia. Business Events: American Days marked the U.S. independence anniversary at Sukhbaatar Square, featuring an AmCham business networking session and innovation-focused activities.

Livestock Health: Foot-and-mouth disease has been confirmed in Dundgovi province, with quarantine and vaccination campaigns launched in affected soums, and similar outbreaks reported in Khovd and Bayan-Ulgii—an urgent reminder of how fast animal health risks can spread in Mongolia’s herding economy. Tourism & Trade: Mongolia welcomed 292,063 foreign tourists in the first five months of 2026, up 32% year-on-year, with Russia, China and South Korea leading arrivals as the government pushes year-round tourism to cut seasonal swings. Diplomacy & Business Links: Mongolia’s parliamentarians met Israel’s embassy officials to deepen cooperation, especially in agriculture, water management and new technologies—aiming to turn dialogue into practical economic projects. COP17 Pipeline: Mongolia is opening proposal intake for COP17’s “Steppe Action Agenda” in August, inviting English-only pilot projects under rangeland, water-land nexus, and nature-based infrastructure themes to attract international donors and investors. U.S. Partnership Events: “American Days” marked the 250th anniversary of U.S. independence at Sukhbaatar Square, featuring AmCham business networking and youth sports alongside public cultural programming. Regional Security Forum: At the 11th Ulaanbaatar Dialogue, South Korea’s unification minister urged Mongolia to help restart dialogue with Pyongyang, while talks also covered trade, mining, infrastructure, healthcare and tourism.

Tourism Momentum: Mongolia welcomed 292,063 foreign tourists in the first five months of 2026, up 32% year-on-year, with Russia, China and South Korea leading arrivals. The government is pushing year-round tourism and extending its “Years to Visit Mongolia” campaign through 2028 to target at least 1 million visitors annually. Green Investment Pipeline: Mongolia is preparing to host UNCCD COP17 in August and has launched the “Steppe Action Agenda,” opening proposals from June 4 for pilot projects under rangeland, water-land nexus, and nature-based infrastructure solutions, with submissions required in English for potential donor and investor visibility. Diplomacy for Trade: Mongolia and Israel discussed expanding cooperation tied to agriculture, water management and new technologies, while South Korea’s unification minister urged Mongolia to help restart dialogue with Pyongyang—alongside talks that also cover trade, mining, infrastructure and tourism. Law Enforcement Cooperation: The U.S.-linked ILEA Bangkok alumni networking event in Ulaanbaatar brought together Mongolian justice and police agencies, aiming to strengthen cross-border cooperation on fraud and financial crime. UNESCO Spotlight: UNESCO added new biosphere reserves worldwide on World Environment Day, including Mongolia, expanding the global network to 797 sites.

Tourism Boost: Mongolia welcomed 292,063 foreign tourists in the first five months of 2026, up 32% year-on-year, with Russia, China and South Korea leading arrivals. COP17 Pipeline: Mongolia is opening proposal intake for its “Steppe Action Agenda” ahead of UNCCD COP17 in August, with pilot projects focused on rangeland, water-land nexus and nature-based solutions—applications are in English and will be showcased to donors/investors via the National Green Lab. Northeast Asia Diplomacy: South Korea’s Minister of Unification Jeong Dong-yeong met President Khurelsukh at the Ulaanbaatar Dialogue, urging Mongolia to help restart dialogue with Pyongyang; talks also covered trade, mining, infrastructure, healthcare and tourism. Green Tech & Data: China’s Hohhot is accelerating green-powered data center construction, using wind/solar and a unified “source-grid-load-storage” setup to expand computing capacity. Finance & Trade Links: Belarus’ ambassador presented credentials to Mongolia’s president, highlighting cooperation in healthcare, light industry, agriculture and engineering. Regional Labor Talks: Trade union leaders from Central Asia and Mongolia met with the ILO Workers’ Bureau in Geneva to discuss social dialogue and a 2026–2027 cooperation plan.

Tourism Boost: Mongolia welcomed 292,063 foreign tourists in the first five months of 2026, up 32% year-on-year, with Russia, China and South Korea leading arrivals as the government pushes year-round travel. COP17 Pipeline: Mongolia is taking proposals for pilot projects under its “Steppe Action Agenda” ahead of UNCCD COP17 in Ulaanbaatar, with the National Green Lab supporting English-only submissions focused on rangelands, water-land links and nature-based infrastructure. Northeast Asia Diplomacy: South Korea’s Minister of Unification Jeong Dong-yeong met President Khurelsukh at the Ulaanbaatar Dialogue, urging Mongolia to help bring North Korea back to dialogue; Khurelsukh called ties with Seoul a “golden era.” Green Energy & Climate Finance: The EBRD projects Uzbekistan growth of 6.5% in 2026 and flags Middle East conflict-driven risks across Central Asia and Mongolia. Mining Update: Rio Tinto says Oyu Tolgoi’s underground ramp-up keeps 2026 copper production on track (800,000–870,000 tonnes), despite regulatory and geopolitical uncertainties.

Tourism Boost: Mongolia welcomed 292,063 foreign tourists in the first five months of 2026, up 32% year-on-year, with Russia, China and South Korea leading arrivals. COP17 Pipeline: Mongolia is opening proposal intake for its “Steppe Action Agenda” ahead of UNCCD COP17 in August, with pilot projects focused on rangeland, water-land links and nature-based solutions; submissions are in English and will be showcased to international donors. Foreign Policy & Trade Links: At the Ulaanbaatar Dialogue, South Korea’s unification minister floated renewed four-party talks (South Korea, North Korea, the U.S., China) and suggested expanding later to include Mongolia, Japan and Russia; separate meetings also covered trade, mining and infrastructure cooperation with Korea and Germany. Finance Watch: Mongolia’s foreign exchange reserves hit a record $7.7bn at end-May, up from $7.0bn at the start of the year. Mining Update: Rio Tinto reiterated Oyu Tolgoi’s 2026 copper production guidance (800,000–870,000 tonnes), tied to ramp-up of the underground mine. Green Economy Angle: EBRD forecasts Mongolia and Central Asia growth of 5.6% in 2026, with risks including energy price swings and slower Russia/China demand.

Northeast Asia Peace Talks: South Korea’s Unification Minister Chung Dong-young urged restarting four-party dialogue involving the two Koreas, the U.S. and China, with a longer-term expansion that could include Mongolia, Japan and Russia, at the Ulaanbaatar Dialogue on June 4. Trade & Investment Facilitation: CAREC countries held the “zero round” talks in Ulaanbaatar on the Trade and Investment Facilitation Partnership Agreement (CARTIF), setting the negotiation format and priorities. Mongolia–Germany Business Push: Mongolia and Germany held political consultative meetings, discussing trade, investment, tech and consular ties, including plans for a business forum and a new Mongolian consulate in Frankfurt. Mining & Energy Watch: Rio Tinto reiterated Oyu Tolgoi’s 2026 copper production guidance (800,000–870,000 tonnes) as underground ramp-up continues, while TMK Energy reported higher May gas output at Gurvantes XXXV and set July drilling. Finance & Industry: Mongolia’s forex reserves hit a record $7.7bn in May; the government approved e-business platform upgrades (version 2.0) to digitize services for legal entities. Livestock Value Chain: Five banks will issue MNT 85bn in concessional loans under the “White Gold” movement to support wool and hides procurement for processing. Regional Growth Outlook: An EBRD forecast projects Mongolia and Central Asia growth of 5.6% in 2026, with risks tied to energy prices, supply disruptions and slower Russia/China.

Forex & Macroeconomy: Mongolia’s foreign exchange reserves hit a record $7.7bn at end-May, up from $7.0bn at the start of the year, with a long-term goal of $10bn. Digital Government: The government approved upgrading the unified e-Business platform to version 2.0, pushing electronic processing for legal entities and reducing the need for separate agency systems. Mining & Energy: Erdenes Tavantolgoi will run the Borteeg section development after no bidder met requirements in an international tender; the state says Mongolia’s benefit share must stay at least 51%. Cashmere & Livestock Value Chain: Five banks will issue MNT 85bn in concessional loans under the “White Gold” movement to fund wool and hides procurement, boosting processing capacity and herder incomes. Environment & UN Cooperation: The Environment Ministry and UNDP will expand work on the Inclusive Green City project and preparations for COP17 under UNCCD. Transport & Trade Links: SCAT Airlines launched a direct Astana–Ulaanbaatar route twice weekly, aiming to support business travel and bilateral trade. Business Risk & Compliance: Mongolia’s e-business push and “White Gold” financing come as Mongolia also tightens law-enforcement capacity with UNODC support against cybercrime, corruption, and money laundering.

Mongolia–EAEU Trade: Mongolia’s interim trade deal with the Eurasian Economic Union is set to enter into force soon, opening a path for value-added exports like combed cashmere and wool, plus processed leather, to Belarus and the wider 180M+ EAEU market. Mongolian Energy & Industry: TMK Energy says May gas output at its Gurvantes XXXV pilot field rose 4% to 24,260 scfd, while it lines up July drilling for up to three new wells and possible workovers. Cashmere “White Gold” Push: President Khurelsukh visited Khanbogd Cashmere LLC under the White Gold program; the firm processes 1,500+ tonnes of combed cashmere yearly, has expanded capacity, and is meeting 35% of electricity demand via solar. Capital Markets: Mongolia’s Stock Exchange saw 11.42M securities traded worth MNT 14.91B over May 25–June 1, with major gains in key indices. Tech & Skills: Mongolia hosted Dronecon 2026 in Ulaanbaatar with 52 competitors, and a new ADB-backed Model Science Laboratory was set up to boost hands-on science education. Regional Connectivity: SCAT Airlines launched direct Astana–Ulaanbaatar flights twice weekly, adding to growing Kazakhstan–Mongolia business travel links.

Mongolia–Kazakhstan Connectivity: SCAT Airlines launched direct Astana–Ulaanbaatar flights on June 2 (twice weekly), adding to Hunnu Air’s growing services and boosting travel and trade links between the two countries. Drone Industry Push: Mongolia hosted Dronecon 2026 in Ulaanbaatar with 52 international competitors; PM Uchral urged phased drone adoption in mining, energy, agriculture, emergency response, infrastructure monitoring and delivery, backed by policy support and private investment. Cashmere “White Gold” Update: President Khurelsukh visited Khanbogd Cashmere LLC under the White Gold program; the firm received a concessional MNT 65bn loan, bought 300 tonnes of raw cashmere, expanded capacity, and met 35% of electricity needs via solar. Capital Markets Watch: The Mongolian Stock Exchange saw 11.42m securities traded worth MNT 14.91bn; major indices closed higher, led by liquid names including Golomt Bank and Khan Bank. Trade Access to Belarus: Mongolia–EAEU interim trade arrangements are expected soon, opening opportunities for Mongolian value-added cashmere, wool, and processed leather to reach Belarus and the wider EAEU market. Education & Science Investment: An ADB-funded project set up a Model Science Laboratory in Mongolia to strengthen hands-on science learning and interdisciplinary skills.

Mongolia–EAEU Trade: Mongolia and the Eurasian Economic Union interim trade deal is expected to enter into force soon, opening a path for Mongolian value-added goods—especially combed cashmere and wool products, plus processed leather—to reach Belarus and the wider 180+ million EAEU market. Capital Markets Watch: The Mongolian Stock Exchange saw 11.42 million securities traded worth MNT 14.91 billion over May 25–June 1, with major activity in Golomt Bank, Khan Bank, Invescore, MGL Aqua and APU; key indices closed higher, keeping sentiment upbeat. Cashmere Finance Push: Under the “White Gold” program, Khanbogd Cashmere received a concessional loan of MNT 65 billion and bought 300 tonnes of raw cashmere, while expanding capacity and boosting solar power—nearly 100 enterprises reportedly got concessional loans totaling MNT 520 billion last year. Drone Industry & Skills: Mongolia hosted Dronecon 2026 with 52 international competitors; PM Nyam-Osor urged phased drone adoption in mining, energy, agriculture, emergency response, infrastructure monitoring and delivery, and highlighted new jobs for drone engineering, coding, flight control and data processing. Education Upgrade: An ADB-funded project established a Model Science Laboratory to strengthen hands-on science learning and research, linking math, physics, chemistry, biology, geography and tech. U.S. Partnership: PM Nyam-Osor met U.S. Ambassador Richard Buangan, stressing third-neighbor cooperation and pushing plans like “Google Reference Schools” and laptop support from Sept. 1, 2026.

Mongolia–Kazakhstan Deal Push: President Khürelsükh’s first state visit in 20 years to Kazakhstan produced dozens of agreements on transport, trade, critical minerals, peaceful nuclear energy and urban planning, signaling a shift from symbolic ties to practical execution. Mongolia Energy Modernization: Darkhan’s thermal network is improving centralized heating with CITECT SCADA for remote monitoring and optimization, with winter 2026–27 preparations underway. Mongolian Gas Milestone: TMK Energy appointed Danny Chong as production manager for its Gurvantes XXXV coal seam gas pilot, aiming to move from proving resources to production optimization and reservoir management. Coal Seam Gas Reserves Approved: Jade Gas Holdings received maiden reserves approval from Mongolia’s Minerals Reserves Council for its Tavan Tolgoi CBM project, clearing the way for development planning and an exploitation licence. Trade & Food Safety Exports: Altai Territory inspectors cleared more than 80,000 tons of livestock products and feed for export to China, Mongolia and others, including 2.6k tons of vegetable feed. Local Business & Services: Mongolia’s ICT push is highlighted as broadband and fiber expansion boosts growth and tax revenue, with e-Mongolia services extending access beyond major cities. Global Context: International tourism rose 2% in Q1 2026, but Middle East arrivals fell 14%, a reminder of how regional shocks can ripple into travel-linked business.

Mongolian Energy & Industry: TMK Energy hired Danny Chong as production manager for its Gurvantes XXXV coal seam gas pilot, signaling a push from resource proof to day-to-day production optimization and drilling as the project scales. Urban Heating Modernization: Darkhan’s centralized heating supply system is set to improve further, with CITECT SCADA already used for remote monitoring and optimization, while the 2026–27 winter prep is underway. Mining Policy: Mongolia tabled major 2026 Minerals Law amendments, aiming to boost domestic processing via royalty cuts, create a framework for high-tech critical minerals, and require financial bonding for mine closures. Critical Minerals & Power: Jade Gas Holdings said Mongolia’s Minerals Reserves Council approved maiden reserves for its Tavan Tolgoi coal bed methane project, clearing a key step toward development licensing. Agri-Exports: Altai Territory export inspections topped 80,000 tons of livestock products and feed by May 31, with batches cleared for China and other markets. ICT & Growth: A new look at Mongolia’s ICT progress highlights how broadband and fiber buildout have supported economic activity and government services.