Mongolia's economy has recovered but the current economic expansion was largely driven by strong coal exports. Public and private consumption growth also supported the economy, spurred by rising household income and the 2023 supplementary budget. Despite increased public spending, the government's fiscal position improved in 2023, driven by higher mining revenues, resulting in a reduction in public debt. The medium-term growth outlook remains favorable, mainly supported by the mining industry. Higher coal exports also improved the external position. Looking ahead, economic growth is expected to slow to 4.8 percent in 2024 as coal exports decline from their peak in 2023 and the agriculture sector continues to be affected by harsh climate conditions. Fiscal expansion and rising household incomes are expected to elevate inflationary pressures in 2024.