Last week was packed with major developments in Mongolia, so here’s a roundup.

🤝 Siberian Power-2 and Ulaanbaatar Gasification

At the SCO summit, China and Russia signed binding agreements to move forward with the long-discussed Siberian Power-2 gas pipeline project. Shortly after, during the Eastern Economic Forum, Prime Minister G.Zandanshatar signed a memorandum of cooperation with Gazprom to implement a project aimed at supplying natural gas to Ulaanbaatar.

• 😈 The Devil is in the Details: While Russia actively promoted the deal across its media, Chinese outlets remained notably quiet. It is also worth remembering that this pipeline is primarily a strategic project to transport Russian gas through Mongolia to China, while key details such as price, timeline, and contractors remain unclear.
• 🤞 For Mongolia to use this gas domestically, additional infrastructure will need to be built to connect to Ulaanbaatar. The Prime Minister has pledged full support for the project.

➕ Economic Updates

From the economic side, the week’s key event was the government’s submission of the 2026 draft budget to Parliament, projecting a ₮1.4 trillion deficit, 1.2% higher than the revised 2025 plan. Over the years, budget revenues have grown on average by 15.9% annually, while expenditures have risen by 14.4%. Despite being framed by the Prime Minister as a reform-oriented budget to overcome economic challenges, it remains another deficit-driven plan.

• 📂 Before the submission of the 2026 budget draft, Fitch Ratings reaffirmed Mongolia’s sovereign and Development Bank ratings at B+/Stable, signaling stable investor confidence despite persistent fiscal deficits.

In short… It was an eventful week for Mongolia, with strategic agreements, fiscal updates, and credit ratings all converging. What the future holds, however, remains uncertain.