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U.S. Budget Deficit Narrows in 2025 Amid Record Tariffs and Rising Debt Payments

October 16, 2025 — The U.S. budget moved to a lower deficit in fiscal year 2025. Tariff collections reached new records. They helped cover higher spending on our growing debt. The Treasury Department shared the news on Thursday. Even with tough economic times, the government cut its shortfall compared to last year.

Deficit Down Slightly Despite Rising Costs

The federal government ended 2025 with a $1.78 trillion budget deficit. This number is $41 billion less, about 2.2% lower than the 2024 deficit. This amount is still high by past standards. But it shows progress in handling the red ink during hard fiscal times.

In September, the fiscal year closed with about $5.2 trillion in revenue, even though spending went over $7 trillion. A large jump in customs duties, driven by tariffs set earlier this year, kept the result from worsening.

Tariff Collections Reach New Highs

Tariff revenues reached $202 billion. This jump is 142% higher than in 2024. The strong rise came with tariffs on imported goods set by President Donald Trump. In the month of September alone, tariff payments hit a record $30 billion. That month increased by 295% compared to the same month last year.

These strong tariff revenues brought a September surplus of $198 billion. This new record gave a needed boost to government funds.

Debt Payments Hit Record Levels

Even as tariff money improved the numbers, the government had to cover very high interest on the growing national debt. Now, the U.S. holds $38 trillion in debt. At the same time, interest payments climbed.

Total interest on the debt passed $1.2 trillion in 2025. That is a new record and about $100 billion more than in 2024. Without counting interest earned from its own investments, net interest payments came to $970 billion. This amount is $57 billion more than defense spending. Debt service became the fourth-largest part of the federal budget, after Social Security, Medicare, and healthcare costs.

Fiscal Metrics and Economic Outlook

Officials in the Treasury now say that the budget deficit-to-GDP ratio will fall to 5.9% for 2025. This is a small improvement but still above the usual 3% seen when the economy is stable. The ratio has stayed near 6% since 2022 as fiscal stress continues.

Treasury Secretary Scott Bessent showed guarded hope last week. He said, “We’re on our way” to cutting the deficit burden. He mentioned forecasts by the Congressional Budget Office that point to a ratio below 6%.

Impact on Inflation and Monetary Policy

Tariffs raised funds, but they also brought a worry for higher prices on some goods. So far, price rises on these items have been slow and steady rather than sharp.

Officials at the Federal Reserve have signaled a possible cut in base interest rates. Their view is that the price effects from tariffs will not last long. The current federal funds rate is 4.00% to 4.25%.


Summary of Key Figures:

  • 2025 Budget deficit: $1.78 trillion (2.2% decrease from 2024)
  • Tariff revenues: $202 billion (142% increase from 2024)
  • September 2025 surplus: $198 billion (record)
  • National debt: $38 trillion
  • Interest payments on debt: $1.2 trillion (record high)
  • Net interest payments: $970 billion (exceeds defense spending by $57 billion)
  • Deficit-to-GDP ratio: 5.9% (small improvement)

The data from the Treasury Department shows a close link between trade rules, debt payments, and budget numbers as the U.S. faces tough economic times. In the coming months, leaders will work to balance tariff revenue gains with the risk of rising prices. They will also meet the high costs of paying the national debt.

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Switzerland Slashes GDP Forecast Amid Impact of Trump Tariffs on Economy

October 16, 2025 — The Swiss government cuts its growth forecast for 2026. They point to high US tariffs as the main cause. The tariffs come from the Trump era and hit trade hard.

Economic Forecast Revision

Swiss leaders keep the 2025 growth forecast at 1.3%. This rate sits well below earlier trends. They now set the 2026 GDP growth at 0.9% instead of 1.2%. A public note shows “higher US tariffs” bear on the outlook. The extra cost weighs on Swiss industries that depend on exports.

Impact of U.S. Tariffs on Swiss Exports

Switzerland banks on exports. In 2024, the US stood as the largest market for Swiss goods. Trade tensions have led the US to add tariffs as high as 39% on Swiss items.

Key export sectors include:

  • Watches
  • Pharmaceuticals
  • Precious metals
  • Chocolate and skincare products

Pharmaceutical goods are hit hard. They now face a 100% tariff if manufacturers do not build or grow production in the US. This rule puts Swiss items at a clear disadvantage.

Trade Policy Challenges and Market Uncertainty

Swiss officials see the world demand for Swiss goods growing slowly. Trade sectors feel high strain from these tariffs. Some effects can spread to slow the wider economy.

Officials watch changes in US trade policy. A new deal or a drop in tariffs might bring better times. For now, risks remain high.

Swiss Franc’s Strength Poses Additional Headwinds

The Swiss franc stands strong as a safe coin. It has grown more than 12% this year. This growth cools prices and makes it hard for the national bank to fight a drop in prices or very low rates.

Leaders warn that if the franc grows even stronger, problems may pile up. Global risks like rising tensions or debt issues can add more force.

Expert Insights: Risks Mounting for Switzerland’s Economy

Charlotte de Montpellier, senior economist at ING, sees more risk ahead. She marks about 4% of Swiss GDP coming from the US. She estimates that the 39% tariff can cut GDP by about 0.86% in two years.

She now predicts a 0.8% growth rate for 2026. That is nearly half of the early forecast. She warns that slow exports might lead some quarters to shrink.

Melanie Debono, a senior economist at Pantheon Macroeconomics, shares these views. She sees Swiss GDP shrinking in the later half of 2025. Falling exports and low investment feed into the worry. She predicts a 0.2% drop in GDP each quarter in Q3 and Q4. ### Conclusion

Switzerland’s new GDP cut and the heavy US tariffs show the tough spot the country faces in trade today. With uncertain trade rules and a strong currency, the near-term view stays dim. As trade talks and policy shifts continue, Swiss growth rests on solving these trade issues and handling currency change.


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Wells Fargo and Pfizer CEOs Warn U.S. Must Innovate to Compete with China

At CNBC’s first Invest in America Forum in Washington, D.C., two top business leaders warned about the U.S. losing its place in the world market. Wells Fargo CEO Charlie Scharf and Pfizer CEO Albert Bourla stressed the need for fresh ideas if the U.S. is to stay ahead of China.

AI as a Double-Edged Sword in U.S. Productivity

Charlie Scharf pointed out how AI changes work in finance. AI helps code teams work 20% to 40% faster. It does this by letting computers take on tasks that people once did. Still, it cuts the number of needed workers.

Scharf said, "We will likely have less people, absolutely." He meant that even though work moves faster, Wells Fargo keeps many staff and still gets more done. At other banks like JPMorgan Chase and Goldman Sachs, fewer hires are already the norm as AI joins daily tasks. He also mentioned that new rule changes could adjust money rules at banks. Such rule changes may let smaller banks work better with their communities even when Washington stays still.

China Closing the Gap in Biotechnology and Pharmaceuticals

Pfizer CEO Albert Bourla shared his worry over China’s fast moves in biotech and drugs. He noted that China now files more patents than the U.S. Bourla warned that if this pace persists, China might pull ahead in health science work.

"Five years ago, the U.S. led with a 90%-to-10% share in patents," Bourla said. "That gap is shrinking, and they might soon do better than us if we do not act soon." He urged change in how efforts are made. He said the U.S. must focus on doing more work, trying fresh ideas, and keeping rules steady.

Removing Barriers for Innovation

Bourla also spoke against trade duties and uncertain prices that slow progress. In a move to keep drug prices steady, Pfizer agreed with the previous administration on a three-year break from specific drug duties. This break came with a promise to keep building drug plants in the U.S.

"Tariffs and price shocks are now less of a worry," Bourla said. He added that AI stands as the next phase in medicine. He looks forward to AI cutting the time needed to find new treatments, especially for hard diseases like Alzheimer’s and cancer.

"We have tried for years to find cures. AI will make it happen," he said.

The Call for Investment and Policy Change

Both CEOs agreed that more spending on new tech and factories is needed soon. They stressed that clear and steady rules must back these efforts. This will help the U.S. lead in new fields and counter the rise of China in world markets.


As the U.S. economy meets new tests, leaders like Scharf and Bourla call for a renewed focus on fresh ideas, smart use of AI, and simple rules. This path will help America stay at the front of science and business progress.

For more insights and coverage on U.S. economic policy and innovation, stay tuned to CNBC.

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Stark Divide Emerges in Economic Confidence Between High and Low-Income Americans

A JPMorgan survey reveals a clear gap in how Americans view the economy. The study shows that people with higher income see the future much brighter than those with lower income. Experts call this a "K-shaped" recovery because one group grows while the other falls behind.

High-Income Earners More Optimistic About Economic Outlook

JPMorgan’s Cost of Living Survey shows higher earners feel better about what lies ahead. They give their outlook an average score of 6.2 out of 10. Over half of them score between 7 and 10. This score tells us that richer Americans feel safe with their money and keep spending on extra items.

Low-Income Respondents Report Struggles Amid Inflation

Consumers with lower income give their confidence a lower score of 4.4 out of 10. Fewer than one in four in this group score between 7 and 10. The gap of 30 points shows the stress felt by those with less money. When asked about paying monthly bills, nearly 60% of rich respondents say their bills are easier to pay, while only 37% of middle-income and 30% of low-income earners agree. The rising costs affect low earners the most.

Spending Plans Reflect Confidence Divergence

Higher-income Americans plan to spend more on non-essential goods over the next year. In contrast, those with lower income work within tight budgets and focus on basic needs first.

Broader Trends Affirm Income-Based Confidence Gap

The survey fits with other national data. The University of Michigan’s Consumer Sentiment Index shows that top earners score about 25% higher than those at the bottom. This finding supports the view of an uneven recovery.

Understanding the "K-Shaped" Economy

In a "K-shaped" recovery, the strong keep growing while the weak get left behind. People with good finances continue to spend and grow financially, while those with less face growing difficulties.


This split in economic views matters for leaders, businesses, and citizens alike. The findings call for measures to help those hit hardest by rising prices and money stress.

As inflation hits, the survey paints a clear picture of an economy where wealth and strain live side by side.

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Fed Chair Jerome Powell Signals Potential End of Quantitative Tightening, Uncertain Outlook on Interest Rates

October 14, 2025 — At the business economists’ meeting in Philadelphia, Federal Reserve Chair Jerome Powell spoke about how the bank nears the end of its plan to shrink its bond holdings. The Fed works to finish its move away from the large balance sheet built during the pandemic. Powell did not give a clear map for future interest rates. This leaves the market with some doubt.

Nearing the End of Balance Sheet Reduction

Powell said the Fed now holds over $6 trillion in securities. This number falls from nearly $9 trillion at the height of the pandemic. Since mid-2022 the bank has let securities mature and not reinvest the money. This step reduces the holdings and makes the money supply less loose.

"Our plan is to end the balance sheet runoff when reserves stay a bit above what we see as a safe level," Powell said. He meant that the bank thinks there is enough money in the system but not too much. He expects that level to come in the coming months.

This change goes against the bank’s earlier actions. Before, the Fed bought many Treasury and mortgage-backed securities to put more cash in the system and help the recovery. Now, with market conditions in change, the bank wants to keep enough cash for smooth payments while avoiding overheating the economy.

Implications for Financial Markets

Even if balance sheet issues sound tough, they affect market moves. Powell pointed out small signs that cash in the system is getting tighter. He warned that further cuts in the balance sheet might slow economic growth. Yet, he said that the bank will not go back to a balance sheet of around $4 trillion like before Covid.

Powell also talked about the interest paid on bank reserves. Some politicians, such as Senator Ted Cruz (R-Texas), have questioned this method. Powell sees it as important for keeping a close hold on short-term rates. He said, "If we stopped paying interest on reserves and other items, the Fed would lose control over rates." The bank faced brief losses when it raised rates quickly, but Powell expects its net income to soon show a rise.

Interest Rate Outlook: A Delicate Balancing Act

Powell repeated the main idea of the policy group, the FOMC. Leaders worry as signs of tightening in the labor market add to the challenge of keeping inflation in check while keeping people employed. Powell noted that though the jobless rate stayed low until August, the growth in payrolls is slower. This change is linked to fewer people working and new job seekers.

After a small rate drop in September, the market thinks there may be two more cuts this year. Powell was careful with his words. He said, "There is no free path in policy as we work with the challenge of meeting both our work and price goals."

Data Challenges and Economic Outlook

The government shutdown makes it hard for the Fed to get the latest data, like job reports and price measures. Powell said that the data they have shows the overall economic view stays steady since the last meeting. He also mentioned that rising costs for goods seem linked more to tariffs than to a deep rise in prices. He referred to upcoming data on consumer prices from the labor bureau.

Summary: What to Watch Next

  • Quantitative Tightening: The bank nears the end of shrinking its bond holdings, with reserves close to a safe level.
  • Interest Rates: There is no clear plan for rate moves; the bank works to balance price shifts and jobs.
  • Labor Market: Signs show slower worker growth and tighter conditions.
  • Economic Data: With ongoing data gaps, the summary of economic news needs care.
  • Interest on Reserves: Paying interest on reserves helps the bank steer short-term rates. No plan exists to stop these payments despite some political criticism.

Powell’s words make it clear that even as the Fed ends one part of its plan, its path depends on new data and ongoing challenges in price and work problems.


This article is based on remarks by Federal Reserve Chair Jerome Powell on October 14, 2025, at the business economists’ meeting, with extra information on how the Fed manages its monetary policy.

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U.S. Treasury Secretary Scott Bessent Accuses China of Trying to ‘Pull Everybody Else Down’ Amid Economic Struggles

In a recent talk with the Financial Times, the US Treasury head Scott Bessent sharply criticized China’s economic plan. He said China, which now faces deep money problems, tries to pull the world down with it.

Export Controls on Critical Resources Stir Controversy

Bessent spoke after Beijing announced on October 9, 2025 a new set of limits on exports. China set these limits on rare earth materials meant for military work. Rare earths help power advanced devices. The United States needs them to run defense systems like the F-35 jet, Tomahawk missiles, and smart bombs.

Bessent said China plans its move to slow the global pace. He warned that while China uses this tactic to slow down trade, it will end up suffering the most from its own controls.

Heightened Tensions Ahead of Key U.S.-China Meeting

These moves add strain just before a meeting between US President Donald Trump and Chinese President Xi Jinping. In reply to the export limits, President Trump said he will tax Chinese goods by 100% starting November 1, 2025, and he even hinted that the meeting could be canceled.

The trade dispute has put pressure on global markets. Major Wall Street indexes dropped sharply when the news spread.

Economic Struggles and Global Impact

Bessent said China is now near a recession or worse. He claimed the nation tries to send out its problems by stopping exports. He warned that these hard measures hurt China’s reputation around the world.

• China’s export limits target rare earths and minerals that drive modern tech.
• The move has sparked worry in US defense and factory circles.
• The tension has led to steep taxes and talk of ending talks.
• Market moves show investors fear long-lasting rough patches in US-China trade.

Looking Ahead

With the US-China meeting close, many around the world now watch to see if talks can lower the strain or if the dispute will keep growing and shake up global trade and safety.


This article is based on confirmed statements by Treasury Secretary Scott Bessent as reported in the Financial Times and market developments leading up to mid-October 2025.

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Labor Department to Release Key CPI Inflation Report Amid Government Shutdown; Other Data Delayed

Even as the federal government shuts down, the Labor Department restarts work on the CPI report. The Department pays close attention to the link between the government pause and the need for inflation data. Inflation numbers for September will soon be seen, though they come with a delay.

CPI Report Resumption and Timing

A White House official notes that the Bureau of Labor Statistics, part of the Labor Department, now resumes work on the September CPI numbers. The report was planned nine days before. The report will now appear at 8:30 a.m. Eastern on October 24, 2025. The CPI shows price shifts for many goods and services over time. This link helps consumers, business people, and decision makers see inflation trends.

Reason for Resuming Work on CPI

BLS stopped work on the report when the government ran short on funds. The Social Security Administration needs the CPI for the third quarter. They must use the numbers to set cost-of-living changes by November 1. This need moved the report forward despite the shutdown.

Other Economic Data Releases Delayed

The CPI report goes ahead. Yet, other data—like the nonfarm payroll report—do not move forward. The shutdown has caused these delays. The Senate did not pass the funding bills and this pause now affects many government agencies and key data for economic analysis.

Context and Impact

  • The report gives insight into inflation trends and helps guide actions by the Federal Reserve, investors, and consumers.
  • The delay in other reports affects the view of markets and government plans.
  • The shutdown shows how a deadlock in funding changes government work and the flow of economic data.

Background on Shutdown

The shutdown has stopped many official reports and services. The Labor Department now puts CPI work ahead of most tasks. This step matters for planning cost-of-living changes for federal benefits.


Summary:

  • Labor Department and BLS will restart the CPI report for September even with the shutdown.
  • The CPI report will be released on October 24, 2025, at 8:30 a.m. Eastern—nine days behind schedule.
  • The report is needed to set cost-of-living changes before November 1.
  • Other key data, such as nonfarm payrolls, remain behind due to the shutdown.
  • The Senate has not passed the funding bills, keeping the shutdown in place.

This update gives some relief to markets and people who wait for inflation data, even as broader issues keep government work at a slow pace.

— Reporting by Alex Harring, CNBC

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WTO Raises Global Trade Growth Forecast for 2025 but Predicts Slowdown in 2026

The World Trade Organization (WTO) changed its view on world trade. It now sees trade growing by 2.4% in 2025. This is higher than the 0.9% forecast earlier. Yet the WTO warns that trade will pick up very slowly in 2026. ### Key Highlights from the WTO Report

  • In 2025, trade will grow by 2.4%.
  • In 2026, trade will grow by only 0.5%. The previous plan was 1.8%.
  • A cooling global economy and rising tariffs bring the slower pace.

Contributing Factors to Trade Growth in 2025

  • Many firms sped up imports to beat expected tariff hikes. This move raised U.S. trade.
  • Good economic trends, steady fiscal moves, and firm labor markets helped raise incomes and spending.
  • Growth in new markets added to trade.
  • Increasing demand for AI items provided a boost. Nearly half the growth came from items like chips, servers, and telecom devices that grew 20% over the year.

The Rising Influence of AI on Global Trade

  • Asia led in AI trade, making up almost two-thirds of the increase in early 2025.
  • The U.S. produced about 20% of the AI trade growth.
  • Trade now runs from raw materials, such as silicon and specialty gases, to parts for cloud tools and AI work.

Risks to Global Trade Outlook

  • New tariff measures in more countries may slow trade.
  • The global economy shows signs of softening. Business and consumer hope drop, and gains in jobs and income slow down in rich markets.
  • Trade in services will also slow. In 2024, services grew by 6.8%. They will grow by 4.6% in 2025 and 4.4% in 2026. Even though tariffs do not hit services directly, services feel the change from goods trade.

WTO Director-General’s Remarks

Ngozi Okonjo-Iweala of the WTO made clear how careful moves, visa tariff responses, and growth from AI and new markets helped ease problems in 2025. She said,
"Trade stability in 2025 comes in large part from the rules that bind us all. We must not be lazy."

She called on nations to rethink and strengthen world trade rules so more people can share in better times even as challenges come.


The WTO report shows that world trade is complex. AI creates new ways for growth, but trade disputes and a softer economy will test progress. All eyes will be on these changes in the years ahead.

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Military Pay Date Puts Pressure on Trump and Congress Amid Government Shutdown

Washington, D.C., October 6, 2025 – The government shutdown drags on with no fix in view. The military pay date on October 15 now weighs heavy. Nearly 1.3 million active military members stand at its center. Missed pay risks sparking public anger and pushes lawmakers toward a deal.


Military Pay Deadline as a Key “Forcing Event”

Goldman Sachs economists share a note with their clients. They point out that the pay day on Oct. 15 may push both sides toward a compromise. Their note links this deadline with a chance to end the shutdown by mid-October. Betting sites like Polymarket show a 71% chance that the impasse lasts past Oct. 14. If the pay date passes without funds, many will feel upset. Lawmakers may then back a short-term fix called a continuing resolution. This plan would keep the government running while talks go on.


Wide Impact of the Shutdown

The shutdown hits more than just military pay. It stops important data that officials need. It may also slow airport security when TSA workers miss shifts. Policy expert Ed Mills at Raymond James says late military pay, disrupted TSA work, or postponed mortgage help may push the sides to change course. He sees a brief continuing resolution as most likely but admits a longer shutdown is still a risk.


Other Deadlines to Watch

Officials and experts note more dates that may add pressure:

  • October 13: Women, Infants, and Children (WIC) program benefits may end.
  • November 1: Obamacare health insurance open enrollment begins.
  • November 21: Congress starts its Thanksgiving recess during busy travel times.

Pimco analysts remind us that starting a shutdown is much easier than ending one. This shutdown, the first full one since 2013, now proves hard to resolve.


Political Standoff and Few Signs of Change

Senate votes are scheduled, yet experts expect little progress soon. President Trump warns that ongoing funding problems could turn temporary layoffs into lasting job cuts. Both parties hold firm, and key decisions stall. Goldman Sachs economists see military pay worries as a push toward a deal. Still, other outcomes remain on the table:

  • The Defense Department might pay troops with its own plans even if funds are low.
  • Congress could pass money solely to cover military pay while leaving the shutdown unresolved.

The October 15 pay date now stands as a key moment that may shift the balance toward ending the funding deadlock.


Summary: The shutdown faces a defining moment with the October 15 military pay date. Missing these payments may stir enough public and political force for Trump and Congress to set a budget deal or pass a short-term fix. With steady positions and few signs of quick change, experts warn that the shutdown might last longer, affecting more services and the public overall.

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Mongolia Joins the Global Data Center Boom with Chinggis Khaan Sovereign Wealth Fund

Mongolia is set to join a fast-growing data center market. The country has rich natural resources and a kind climate that suit new digital projects. This step comes from a plan that uses the Chinggis Khaan Sovereign Wealth Fund. The fund uses money from Mongolia’s mineral wealth to boost social well-being, build roads, and work on green energy projects.

A New Era Powered by Data and Renewables

The law started the fund in April 2024. It now holds about $1.4 billion. The fund works to change Mongolia’s economy by investing in the rising need for data centers for cloud computing and AI. Global AI tasks grow, and data centers that use less power are needed.

Temuulen Bayaraa, head of the fund, spoke at the Milken Institute Asia Summit in Singapore. She said, "We have vast land and a good climate for data centers." The fund plans special economic zones like Hunnu City. Hunnu City will be a smart urban area built for data center work and related tasks.

Aligning Investments with Green Energy Initiatives

The fund also directs money to build large renewable energy grids. This plan helps increase the flow of green energy outside Mongolia. The country lies between Russia and China and builds strong ties with both. These links help in supplying green power to nearby markets.

Mongolia now plans to grow green power in its electricity mix to 30% by 2030. This is a jump from 18.3% in 2023. The fund puts support into wind and solar projects that power data centers and meet world plans for cleaner energy.

Responding to Global Trends and Domestic Needs

This fund follows a seen trend in Asia. Countries like Japan, Singapore, and Malaysia invest more in data centers as AI and cloud projects grow. Goldman Sachs sees that energy use by data centers will go up by 50% by 2027 and possibly by 165% by 2030. Mongolia aims to cut risk from mineral price swings. The country’s minerals are a key funding source. Erdenes Mongol, a state-owned company with stakes in mining, manages the fund to share mining money in a fair way.

Rebuilding Trust and Driving Inclusive Growth

Many Mongolians have felt that mineral wealth was not shared well. In 2025, widespread protests led to the exit of Prime Minister Oyun-Erdene Luvsannamsrai. Bayaraa said the fund must rebuild trust by using mineral money for the people.

She stated, "The fund builds trust by managing and sharing wealth in a separate way." It will pay for schools, health care, housing, and job training. This plan should help grow a strong middle class and support fair progress.

Citizens can watch the fund’s money go through an easy-to-use app. This step helps everyone see where funds go.

Attracting Global Expertise with a Local Impact

The fund also plans to hire Mongolian experts who have worked abroad in banking, investing, and wealth management. These skilled people will help run the country’s funds. Bayaraa noted, "Mongolia has long drawn foreign money into the country. Now, for the first time, we invest to join a global scene."

As Mongolia moves into the data center space backed by green energy and a strong fund, the nation looks to build a diverse, clear, and fair economic future.


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