Gold Chain

 The outcome of recently held 12th Ministerial Conference of World Trade Organisation  in Geneva is worth discussing. Unlike the World Bank or IMF WTO does not delegate power to Board of Directors or Organisational Chief. Instead all decisions of the WTO  are taken collectively through consensus. Ministerial Conference is the highest policy making body of WTO which normally meets once in every two years and take decisions on all matters related to multilateral trade issues and agreements. Representatives of 164 countries who took part in the meeting could make some breakthrough in matters relating to Covid19  vaccines, fishing, food security and e-commerce.  12th Ministerial Conference decided to permit developing  countries with the capacity to manufacture and export Covid19 vaccines without patent holders consent.But the flexibilities comes with lots of conditions. The resolution in TRIPS  restricts the waiver in patents to Covid19 vaccines only for ...

Stagflation is a situation where growth of the economy in terms of output of goods and services slows down drastically and the levels of inflation, price level and unemployment shoots  up at the same time. In the early 1970s when OPEC  (Organisation of Petroleum Exporting Countries) a cartel  like organisation, cut oil production and increased it's prices several fold world faced an unprecedented crisis constraining the productive capacity of most economies that were heavily dependent on oil imports hampering their economic growth. On the other hand the oil price spike also led to inflation and push in costs and prices of commodities and services , leading to stagflation.  In recent years combined effects of Covid19 and Russian  invasion of Ukraine has accelerated the slow down in global economy which is already suffering from the phase of protracted feeble growth and elevated inflation. According to World Bank this raises the risk of stagflation with potentiall...

 When global institutions like World Bank  slashed India's GDP growth projection from 8.5% to 7.5% for 2022-23,OECD projected 6.9% and Reserve Bank of India estimated it to be 7.2% mainly due to inflationary pressures and global economic conditions.After recording the strongest GDP output  growth among  the G 20 nations in 2021-22, the Indian economy is progressively losing momentum as inflationary  expectations remain elevated due to rising global energy,food and commodity prices,monetary policy normalisation and emerging geo political tensions due to Russia Ukraine war.According to RBI estimate assuming normal monsoons and crude oil price of India basket of $105 per barrel inflation based on consumer price index was projected above tolerance limit in 2022-23 at 6.7%, with in Q1 at 7.5% ,Q2 at 7.4% ,Q3 at 6.2% and Q4 at 5.8% with risks evenly balanced.About 75% of the increase in inflation projections could be attributed to the food group.The recent spike in to...

 The provisional estimate of India's GDP(sum total of value of goods and services produced annually) growth released by NSO for the year 2021-22 showed that GDP has grown by 8.7%.Quarter wise estimate showed that Quarter one Q1 recorded highest 20.1%,followed by Q2 8.4%,Q3 5.4%,and Q4 4.1%.Globally country wise estimate indicated that India is the fastest growing major economy of the world relegating China to a backward position. Sector wise growth in India showed that agriculture sector which performed 3.3% growth in 2020-21 maintained 3% in 2021-22,whereas industrial sector which witnessed negative growth of-3.3% in 2020-21 recorded 10.6% growth in 2021-22 by virtue of base effect.Similarly service sector which also experienced negative growth rate of-7.8% in 2020-21 achieved 8.4% in 2021-22.But it may be noted here that India's growth rate declined to a four quarter low of 4.1%in January March 2022 period due to Russia Ukraine war that inflated prices of fuels, food,and othe...

 The Indo Pacific Economic framework (IPEF) has been launched by the USA at the recent QUAD meeting in Tokyo joined by other QUAD members namely India, Japan and Australia apart from South Korea and 8 other East Asian countries outside QUAD  for prosperity of the region has attracted much attention. India became one important member of the 13 nation economic initiative to strengthen economic partnership among participating nations to enhance resilience, sustainability, inclusiveness, economic growth, fairness and competitiveness in the Indo pacific region.IPEF desires to make  the Indo pacific region an engine of  global  growth. Unlike traditional Free Trade Agreements IPEF won't negotiate tariff or market access and the framework will focus on integrating partner countries broadly focusing in following four pillars. 1.Trade.  In trade it intends to build  high standards,inclusive, free and fair trade commitment and develop new creative approaches in ...

 Foreign Exchange reserves (FER) of Central banks have been receiving much attention in the light of increasing global inflation, supply bottlenecks, depreciation of currencies and declining global output,  trade and investment. Foreign Exchange Reserves are assets held as reserves by the central bank. It consists mainly of foreign currency assets, gold and IMF'S Special Drawing Rights (SDRs).It can also include deposits, bonds, treasury bills and other Government securities.Foreign Exchange Reserves  are  nation's back up funds in case of an emergency like rapid devaluation or depreciation of its currency. Countries' generally use foreign exchange reserves to maintain a  stable rate of value of domestic currency, competitively priced exports, and to provide liquidity in the case of a crisis and dip in confidence for investors.Reserves are also required to pay external debt and to fund sectors of the economy. The main purpose of FER is to keep the  value of...

 In the beginning of human civilization payments made were simple  through direct exchange of goods and services where barter system was prevalent. As civilisation advanced human wants increased and settled life started volumes of goods and services transacted shot up several fold  "Money"came into existence and it has transformed itself into different forms like-ommodity money, metallic money, paper money, and plastic money. Money served the primary functions of medium of exchange and measure of value,and secondary functions of store of value and standard  of deferred payments. Money can also be classified into fiat money- issued by the order of Government,Fiduciary money like cheques and  bills of exchange, full bodied money where intrensic value is same as face value and credit money where value is more than intrinsic value.Gradually in recent years virtual or digital electronic money transactions gathered dynamic proportions. Introduction of digital payments...