Mongolia has experienced significant economic growth in 2023, with a 7% increase in real GDP. This expansion is largely attributed to record-high coal production driven by strong demand from China. Despite a robust increase in import volumes, the country achieved a current account surplus due to the sharp rise in coal exports. However, the International Monetary Fund forecasts that the current account balance will revert to a sizable deficit due to declining coal prices.

In September 2022, Mongolia launched a 233-kilometer direct rail link to China, marking a significant milestone in its plan to become China's leading supplier of high-quality coal from the Tavan Tolgoi mine, which boasts over six billion tonnes of coal reserves.

Despite these economic advancements, Mongolia faces environmental challenges. The country is enduring another severe winter, with extreme conditions known as "dzud" leading to the deaths of over 7.1 million livestock, more than a tenth of the nation's entire herd. This situation threatens food security and economic development, particularly impacting nomadic herders who rely on livestock for their livelihoods.

The increasing frequency and severity of dzud events are linked to climate change. Since 2005, Mongolia has warmed by 1.59°C—a rate nearly three times the global average. This warming trend results in hotter, drier summers that deplete pastures, followed by harsher, snowier winters, creating a vicious cycle that exacerbates dzud conditions.

In response to these challenges, Mongolia is striving to balance economic development with environmental sustainability. The government is investing in infrastructure to support the mining sector while also seeking solutions to mitigate the impacts of climate change on its traditional herding communities.