Mongolia is facing one of its most severe political crises in decades after tension between the country’s parliament and President Ukhnaagiin Khürelsükh escalated into a constitutional standoff following parliament’s move to dismiss Prime Minister Gombojavyn Zandanshatar. The Constitutional Court later ruled the PM’s dismissal unconstitutional, deepening the power struggle between the legislative branch and executive branches. In parallel, a nationwide teachers’ strike quickly evolved into broader protests against government inefficiency and corruption.

The confrontation primarily involves the ruling Mongolian People’s Party (MPP) and the opposition Democratic Party (DP). The MPP, the party of both the PM and the President, is experiencing internal tension and seemingly losing its ability to function as a united front. In parallel, the formerly weakened DP is attempting to regain influence and position itself as a potential center of a new political configuration. As a result, partisan infighting has paralyzed parliamentary work, undermining public trust and deterring foreign investors.

At the same time, Mongolia’s economy faces mounting challenges, including high inflation, rising poverty and heavy dependence on China for exports and Russia for fuel. Falling coal prices and delays in infrastructure development have further limited economic growth. Foreign investors now view political instability as the main risk to Mongolia’s reform agenda and long-term projects. Without a political compromise and stronger governance, the country risks prolonged instability, weakening democratic institutions and delaying much-needed modernization.

Possible forward scenarios include de-escalation through the formation of a new government to stabilize the political and economic climate. If the situation continues to deteriorate, it will lead to a prolonged political crisis, a loss of public trust in state institutions, and a slowdown in economic reforms. Although less probable, the President may use the crisis as an opportunity to consolidate his power by creating preconditions for a managed authoritarian model.