On November 8, Mongolia’s Parliament approves the 2025 state budget despite widespread criticism from the private sector and citizens. Just 11 days later, President U. Khurelsukh exercises his constitutional authority to veto the budget in its entirety, marking a pivotal moment in Mongolia’s political and fiscal history. 

•  This veto marks President U.Khurelsukh’s second during his tenure. By law, Parliament must review and decide on the President’s veto within 14 working days. Finance Minister B. Javkhlang states that the government welcomes the veto and expects Parliament to follow suit. 

😏 So cliché: Double Deficit Phenomenon

The "double deficit" phenomenon, where both the government budget and the current account are in deficit, persists as a significant issue in Mongolia’s economy. Since 2000, the country’s budget faces a deficit in 18 out of 24 years, with the combined deficit exceeding ₮19.7 trillion. The situation has become almost cliché — a predictable pattern of fiscal imbalance that continues to haunt the economy. 

• 🐮 Cash Cow – Coal: Mongolia’s reliance on coal exports drives the economy, but a significant 69% drop in coal prices since 2022 severely impacts revenues. Meanwhile, the GDP, which once exceeded $5 billion, now stands at $4.7 billion. External debt also increases by 13% compared to 4 years ago. Despite these challenges, Mongolia continues to approve deficit budgets, increase spending, and face rising inflation. 

📝 Final Thoughts

President U.Khurelsukh’s veto is a bold move that reflects his commitment to fiscal responsibility and legal compliance. While some critics suggest that the veto may be politically motivated, with the 2027 presidential election on the horizon, it underscores the urgent need for balanced government finances. 

Mongolia has a long-standing tradition of approving deficit budgets since 2000, with the "double deficit" phenomenon remaining a constant issue. Regardless of the political context, it is crucial for the government to address this ongoing fiscal imbalance and adopt more sustainable fiscal policies. The key question remains: How long will the government continue to turn a blind eye to this persistent deficit cycle?