Ulaanbaatar’s Budget Explosion: The Capital Outgrowing Its Guardrails

While corruption is nothing new in Mongolian politics, no one predicted the sheer velocity of Ulaanbaatar’s recent fiscal explosion. The June parliamentary hearings shattered any illusions of normal municipal growth.

The city's budget has grown from 1.4 trillion MNT (~$440 million) in 2022 to 7.8 trillion MNT ($2.18 billion) in 2026. Its planned deficit, at 2.4 trillion MNT ($671 million), now reportedly exceeds that of the entire consolidated state budget.

Ulaanbaatar’s downtown

A capital city that once drew on the centre for funding has become a fiscal actor in its own right, spending at a pace its institutions were never built to supervise.

There is a massive gap between what they promise and what they actually get done. The 16 mega-projects initiated in the capital require a total budget of 28.9 trillion MNT($8 billion), but they face severe execution and financing risks. Currently, most of the projects are stuck in the design and feasibility study stages, with only 5% (1.4 trillion MNT) of the total funding spent so far. Furthermore, 66% of the financing (19.1 trillion MNT) relies on unconfirmed foreign loans and public-private partnerships. This funding lag puts 129.4 billion MNT ($36 million) already spent on preparation at risk of being wasted, while private contractors on projects like the Selbe sub-center are forced to self-fund due to suspended municipal financing.

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