Mongolia’s total government debt reached ₮35.5 trillion in the second quarter of 2025, marking a 19.5% increasecompared to the same period last year, according to official data from the Ministry of Finance and the Bank of Mongolia.
Rising External Liabilities
The country’s total external debt stood at USD 39.6 billion as of Q2 2025 — up USD 4.5 billion (12.7%) year-on-year and USD 1.6 billion (4.1%) from the previous quarter.
The rise in external debt was mainly driven by:
- Foreign direct investment and intercompany loans: +USD 1.7 billion (+10.7%)
- Depository institutions other than the central bank: +USD 1.3 billion (+72.0%)
- Government external debt: +USD 824.5 million (+10.3%)
Composition of Mongolia’s External Debt
- Foreign direct investment and intercompany loans: USD 18.0 billion (45.5%)
- Government debt: USD 8.8 billion (22.3%)
- Depository institutions (excluding the central bank): USD 3.1 billion (7.9%)
- Central Bank of Mongolia: USD 1.6 billion (4.0%)
- Other sectors: USD 8.0 billion (20.3%)
Domestic and External Breakdown
Within the total ₮35.5 trillion government debt:
- External debt rose by ₮4.7 trillion (+16.2%) year-on-year.
- Domestic debt surged by ₮1.1 trillion, an 8.9-fold increase, reflecting expanded domestic borrowing activity.
- Government loan guarantees, meanwhile, declined by ₮78.3 billion (-30.8%) during the same period.
Analysts note that the rise in both external and domestic debt reflects increased infrastructure spending, currency depreciation, and public investment programs, but also raises concerns about debt sustainability ahead of major bond maturities in 2026–2027.
