Ulaanbaatar, October 31, 2024, /MONTSAME/. Minister of Finance of Mongolia Javkhlan Bold presented the draft State Budget for 2025 during the session of the Standing Committee on Economic Affairs of the State Great Khural of Mongolia, noting “The following budget of 2025 is notable by fully supporting regional development for the first time."

The Finance Minister noted, “The following year’s State Budget will aim at investing in the regions rather than individual aimags or soums, decentralizing from the Capital City, improving the business environment of the regions, and attracting investments through mega infrastructure projects. As a result, Mongolia’s auto road is planned to be increased by 4,400 kilometers, energy capacity increased by 1650.9 megawatts and 1519 km of overhead powerlines commissioned by 2028.  Furthermore, projects in the social sector will be continued, including projects on 93 schools, 67 kindergartens, 37 hospitals, 22 school dorms, 60 culture and sports, and 17 in social protection sectors.”

Minister Javkhlan underlined the following aspects of the new State Budget, "The State Budget will support the participation of the private sector through tax policy. It was decided that investment alone could not stimulate regional development, so, varied tax policy will be implemented. In line with this, 20 different taxes will be imposed based on the unique characteristics of the regions, increasing the independence of the aimags’ budget,  and the regions will have the opportunity to attract investments separately and compete with economic policies. Additionally, the policy will be adopted to encourage the engagement of the private sector in major developments that are compatible with regional development goals.

The budget focuses on addressing the pressing issues of Ulaanbaatar. In the past 30 years, a total of MNT 11.5 trillion has been invested in the capital, with plans to invest over MNT 30 trillion in the next four years. To address Ulaanbaatar's pressing issues, such as traffic congestion and environmental pollution, the 2025 budget draft includes an investment of MNT 4.5 trillion for the capital for the first time. This investment is expected to reduce congestion, decentralize the city, and create conditions where basic social services can be accessed within 20 minutes, leading to a tangible decrease in traffic congestion.

As part of this plan, the "Khushigiin Khundii Tunnel" and the "Uuduu Temuulekh Mongol" suspension bridge megaprojects will be implemented with government debt guarantees. The Government’s one-stop service center will be funded by the state budget, while projects such as the "Metro" high-capacity public transportation system, the Tuul Highway, the New Ikh Toiruu Highway, and the New Circle Road will be implemented through government funds for capital and the public-private partnerships. As a result of these measures, air pollution is expected to decrease by approximately 22%, public transportation accessibility will be improved, and traffic congestion will be reduced. Additionally, the establishment of infrastructure for the construction of 37,000 households will boost employment and significantly improve the business environment for the private sector. The draft law on Mongolia’s 2025 budget aims to implement the outlined policies, resulting in the export of 83 million tons of coal and 1.8 million tons of copper concentrate next year. This would lead to a total foreign trade turnover of USD 32.8 billion, an economic growth rate of 8.0%, and a consolidated budget revenue of MNT 36.8 trillion, as stated."

The Standing Committee on Economic Affairs recommendations regarding the second discussion of next year's budget proposals will be forwarded to the Standing Committee on Budget.