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Today’s highlights in 3 sentences:

•  🆙 Inflation Update

• 👁️ Ulaanbaatar in 2040: A Vision of the Future

• 🏃‍♂️‍➡️ Development Bank’s New Strategy

Let’s Dive In. 🌊

MARKET

• NSO: Inflation in December stands at 9%, marking a 3.9 percentage point increase since June, the lowest inflation period of 2024. 

• IND: India to sign a mining pact with Mongolia soon. 

• XAC: XacBank's net profit rises by 20.3% year-on-year and 5.1 times compared to 2020, reaching ₮170.9 billion in 2024. 

 💭 Ulaanbaatar 2040: Metropolis or Mirage?

The development plan for Ulaanbaatar until 2040 is submitted to Parliament.

👁️ Ulaanbaatar in 2040: A Vision of the Future

The ambitious construction plan requires ₮243 trillion in funding, with 51% coming from foreign and domestic private investments, and 49% from state budgets, foreign loans, aid, and bonds. Ulaanbaatar’s population is expected to grow by 25%, reaching 2 million. To accommodate this growth, 405,000 people will settle in satellite cities, which will require additional heating, electricity, housing, and infrastructure. Key highlights include:

• 🏙️ Satellite cities: 14 city centers, 14 local-level cities, and 42 neighborhoods as "20-minute cities."

• 📍 Heat Sources: 15 new locations double the current heat load to 7,480 MW.

• 🔋 Energy: Electricity generation increases by 4.6 times to 5,408 MW, with 30% from renewables.

😳 A Future Metropolis?

Housing increases to 91%, reducing ger areas to 9%. The metro system, designed to serve 1.2 million passengers daily, significantly enhances transport accessibility, with operations expected to begin by 2028.

• 🛣️ Transportation Infrastructure: On the surface, they plan to construct 8 horizontal, 12 vertical, and 3 circular tracks, totaling 17,000 km.

• 🏃‍♂️‍➡️ Improved Traffic Flow: As a result, during rush hour, speeds rise to 22.5 km/h, allowing 5 km to be covered in 13.2 minutes, compared to the current 9 km/h.

🔕 Distrust in Promises

Mongolians remain skeptical, recalling past reforms that were abandoned. While some improvements are visible, many fear the lack of long-term planning and execution. Feasibility studies for large-scale projects are questioned, raising concerns about whether these grand visions will materialize or join the list of shelved initiatives.

🎯 Political Challenges

Political interference and changing administrations often disrupt long-term projects. Without stable governance and commitment, even well-planned initiatives face delays or cancellations. Ensuring continuity across political terms is critical for the success of Ulaanbaatar's transformation.

Whether Ulaanbaatar will truly become the metropolis envisioned depends not only on ambitious construction projects but on overcoming political and logistical hurdles. The city’s future hinges on consistent leadership, effective planning, and the ability to turn promises into reality.

🆙 Development Bank Unveils New Strategy

The Development Bank of Mongolia plans to finance ₮2 trillion in projects this year, revises its strategy for 2030, aiming to increase its share to 12.8% of GDP. This ambitious plan seeks to grow the bank’s assets by $7 billion over the next 5 years, positioning it as a cornerstone of Mongolia's economic development.

🕵️‍♂️ 5 Main Directions of the Revised Strategy

In 2023, the Development Bank contributes 3.5% to GDP. To expand its influence, the strategy outlines five priorities: responsible governance, professional management, green financing, innovation, and supporting digital transition.

1️⃣ Balance Sheet Clean-up

The bank’s current assets total ₮2.4 trillion, with ₮2.3 trillion in outstanding loans, but 57.5% of these are non-performing, amounting to ₮1.7 trillion. To address this, the bank plans a ₮700 billion equity infusion, focusing on repaying state-related loans and stabilizing finances.

2️⃣ Political Influence and Financing Projects

Since its founding in 2011, the DBM has provided ₮7.6 trillion in loans, financing major projects like the oil refinery and Tavan Tolgoi power plant. However, political influence has historically hampered its efficiency, with shifting priorities and interference slowing project implementation and increasing non-performing loans. Past political entanglements have led to delayed projects and misaligned objectives, challenging the bank's ability to fulfill its core duties.

• Looking ahead, the DBM recognizes the necessity of reducing political interference to ensure that its projects align with Mongolia’s long-term economic goals. The bank is now pushing for legal reforms to enhance its autonomy and efficiency, aiming to transform into an Eximbank that focuses on export and import financing. This transformation will help the DBM navigate the political landscape more effectively, with a clearer mandate and greater resilience against external pressures.

Final Thoughts

While the DBM strives to reduce non-performing loans, political challenges persist. The bank’s success will depend on minimizing political interference, implementing necessary legal reforms, and improving operational efficiency. By strengthening its governance and focusing on strategic objectives, the DBM can fulfill its potential as a key driver of Mongolia’s economic growth and stability.

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⭐ Selected for you

ECONOMY & BUSINESS

• Aranjin Resources Announces Private Placement and Debt Settlement. (InsideMongolia)

• Zijin Mining Group Increases Stake in Xanadu Mines. (TipRanks)

POLITICS

• Chinese State-Sponsored RedDelta Targeted Taiwan, Mongolia, and Southeast Asia with Adapted PlugX Infection Chain. (RecordedFuture) 

• United States Donates 2000 Medical Devices to Mongolia to Help Combat Flu-Like Illness. (U.SEmbassy)

• 100 Years After Genocide, Mongolia’s Jewish Community Is Tiny. (Chabad)

• Mongolia’s Political Double Speak on Combating Air Pollution. (TheDiplomat)

• Mongolia: SWOT Analysis. (SpecialEurasia)

• Mongolia Steps Up Its TIR Transit Game. (IRU)

In the Capital of Mongolia, Protesters Blocked the Central Avenue. (Eadaily)

CULTURE & LIFESTYLE

• Opera House Spotlights Part One: Mongolia. (OperaWire)

• 25 Places to Go in 2025 Spotlight: Ulaanbaatar, Mongolia. (MatadorNetwork)

• From Mongolia to Old Trafford: MR. WAZZA talks Manchester United! (CBSSportsGolazo)

• Mongolian Lunar Year 2025. (Rove)

• Seoul to Ulaanbaatar + Food Review! (MSN)

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Publisher: Ts.Ankhbayar
Writer: M.Khulan
Graphics by: Ts.Tselmeg

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be or constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.