According to the National Statistics Committee, the Mongolian economy is facing new challenges due to several new government tax breaks which are designed to help the state budget income but will place the country in a very weak economic position. These new tax breaks make Mongolia one of the lowest taxing nations in Asia. Adding to the situation, B.Badamtsetseg, Head of the Macro Economic Department of the National Statistics’ Committee, said that for the first two months of this year the exports benefit reached USD 36.4 million, down more than USD 20 million compared to the previous years.

According to an official announcement by the World Bank, Mongolia will receive USD 37 million of aid for 2008. Focus areas to spent the money will be projects in regards to ease poverty, address climate change problems and the development of "clean" sources of energy.

The tense relationship of Japan and North Korea will hopefully begin to mollify as representatives from both nations have initiated talks in Ulan Bator concerning North Korea’s nuclear program and past abductions of Japanese civilians by North Korean agents. This meeting is one of many working sessions established following the six nation deal agreed upon in February that aimed to disarm and dismantle Pyongyang’s nuclear programs. Japan is expected to take a hard stance on the kidnappings, where a resolution is imperative in order for both nations to consider normalized relations. North Korea is expected to seek a settlement for the Japanese occupation of the Korean peninsula from 1910 to 1945.

Ulaanbaatar Railway, jointly owned and operated by Mongolia and Russia interests, has raised hard seat and premium deluxe prices by 25 percent and grand deluxe cabin prices by 50 percent in an effort to quell operating losses on passenger travel. According to reports from the UB Post, the loss was explored to be offset by revenue generated through transporting oil from Russia to China. Unfortunately, the recent bankruptcy of Russian-based Yukos Oil has terminated any possibilities at this moment. Shipping prices for cargo freight have not been changed.

The Director of Rio Tinto Group, the mining group working in conjunction with the Canadian firm Ivanhoe Inc. to implement the Oyu Tolgoi gold and copper mine project, met substantial protest while convening with members of the Mongolian government. Director Tom Albanese held meetings with the President of Mongolia, the Prime Minister, and the Speaker, and also spoke with members of a working group set up by Parliament to review the provisions of the draft investment agreement on the Oyu Tolgoi project. Currently, the government has submitted the draft agreement to Parliament and it is now for Parliament and its committees to decide when or how it will be discussed. The Resolute Reform Party and the Green Party of Mongolia held protests against the visit of Albanese and his meetings with the country's leaders and Parliament members, as they perceived the encounter as a method to expedite the ratification of the stability agreement.

The desire to safeguard Mongolian interests has sent the drafted investment agreement between the Mongolian government and Ivanhoe Mongolia Inc. from the Committee of Finance to a Parliamentary Working Group. N.Bayartsaikhan, Minister of Finance, said that once Parliament approved the draft and work on the projects commenced, Mongolia's share of the profits will be more than the company's. Ivanhoe Mines has already been specifically exempted from paying the Mongolian government's windfall tax law, on the grounds that Ivanhoe would be unable to run their operations on the project.

The Standing Committee on Economics of the State Great Hural (Parliament) of Mongolia convened to discuss and draft the agreement setting out the terms of the country's investment in Ivanhoe Mine's Oyu Tolgoi copper and gold project, a world scale copper-gold mine located in Omnogobi province. According to government sources, the mining company Ivanhoe would make USD 47.7 billion in profits from the project, 22 times more than the USD 2.7 billion that it is expected to invest in it. Based off the terms agreed to by the parties involved, open-pit mining operation would start in 2010 and sub-surface mining in 2014.

Mongolian President Nambaryn Enkhbayar said that he expects Mongolia and Russia to reach an annual trade level of around USD 1 billion. President Enkhbayar went on to say that he would seek investment from Russia that could benefit both nations. President Enkhbayar made these comments in anticipation of a December meeting with Russian President Vladimir Putin that will take place in Russia.

The President of Mongolia N. Enkhbayar and North Korea's Kim Yong Nam met in Mongolia to discuss diplomatic relations on July 20. Kim and President Enkhbayar signed bilateral cooperation agreements on trade, health, marine transport, and labor force exchange. Kim's trip represented the first high profile state visit from North Korea to Mongolia since 1988 when North Korea's President at the time, Kim Il Sung, visited.

On May 30, Russian oil company Rosneft had declared it would not be able to continue to send oil to China through Mongolia due to the high transportation cost. However, after Russian Railways granted a 22 percent tariff discount and China's UNIPEC settled for price changes, Rosneft has agreed to transport 200,000 metric tons of oil monthly to China via rail through Mongolia. The Russian-Mongolian company Ulan-Bator Railway is expected to reduce its tariff in the coming days as well, allowing Rosneft to finalize the deal.