The Constitutional Court on Wednesday evening said a motion passed by the State Great Khural or parliament last Friday to dismiss Prime Minister Gombojav Zandanshatar had no legal basis, China’s state broadcaster reported on Thursday. Mongolia’s official news agency, Montsame, has not yet reported on the decision.

The court sided with President Khurelsukh Ukhnaa, who on Monday vetoed the parliament’s resolution to dismiss Zandanshatar, citing procedural irregularities, including the use of an “incorrect voting formula.”

Zandanshatar, nominated by President Khurelsukh and named as prime minister in June, is expected to be able to fend off reformists within the Mongolian People’s Party led by former parliamentary speaker Amarbayasgalan Dashzegve, said Xu Tianchen, a senior analyst at the Economist Intelligence Unit.

Zandanshatar is seeking to push through a more conservative economic policy ahead of the next election in 2027, resisting calls for stronger anti-corruption measures and progressive taxation.

But the confrontation could lead to an economically damaging policy stalemate, analysts say, worsening a cost-of-living crisis and delaying efforts to diversify the economy beyond mining, as government instability hampers long-term planning and deters foreign investment.

The Mongolian People’s Party also faces pressure to address public discontent over allegations that government officials misappropriated state funds and were engaged in corruption.

Those concerns sparked large-scale street protests in urban centers, including the capital Ulaanbaatar, which ultimately prompted parliament to vote to remove Prime Minister L. Oyun-Erdene four months ago.

“I’m afraid that the turbulence will last until 2027, as the factional conflict within the Mongolian People’s Party continues,” said Xu.

“President Khurelsukh has tried to defend his people, but his influence will diminish as he approaches the end of his presidency,” he added. “Amarbayasgalan and his fellows will try hard to dominate the political landscape.”