- Global Economy is going through an uncertain time due to ongoing Russia-Ukrain war, Covid pandemic, disruptions in global supply chains and increasing food, energy and commodity prices. In this environment, the focus on everyone’s mind, from general public to policy makers in India and across the world is – Inflation.
- Inflation is at levels which have not been seen by recent generations. Around two/third of the emerging market economies are witnessing inflation of above 7% as against target of 3 to 5%.
- Monetary tightening continued across the globe in June 2022 with many central banks increasing the pace of tightening. Sixty increases in key interest rates were effected by major central banks during March-May 2022.
- In its June meeting, the US Federal Reserve raised the target range of the Federal Funds rate by 75 basis points (bps) to 1.5 – 1.75%, the first 75 bps hike in 28 years, jittering the markets.
- In India positive news is that inflation has marginally eased for second month in the row on the back of receding food prices.
- The recent revival of the southwest monsoon and rejuvenation of sowing activity has raised hopes of another good year for agricultural activity, which should translate in good rural demand.
- Ongoing geopolitical tensions are triggering safe haven demand for the US dollar and causing persistent depreciation of the Indian Rupee. The Rupee hit new lows against US$ in June 22 due to continuous sale of Indian financial assets by foreign investors and recent demand from importers.
50th World Environment Day:
- 2022 marks 50 years since Stockholm Conference which led to the designation of 5 June as World Environment Day.
- Only One Earth was the motto for the 1972 Stockholm Conference; 50 years on, the motto holds true – this planet is our only home, whose finite resources humanity must safeguard.
- Currently we are using the equivalent of 1.6 Earths to maintain our way of life, and ecosystems cannot keep up with our demands. We must make sustainable living our default option.
- On the political stage, environmental issues are usually placed at odds with economic issues; environmental goods, such as clean air and clean water, are commonly viewed as priceless and not subject to economic consideration.
- There is, however, substantial overlap between economics and the environment. Case in point is a 20 year old study in Gir Forest which revealed that massive economic benefits have accrued to the people due to conservation efforts in Gir protected area (Gir PA).
- A 2002 study of EERC, supported by Government of India and World Bank, quantified economic benefits and cost of conservation of Gir Ecosystem. Study summarized that the direct and indirect benefits of Gir PA (in 1995-96 prices) were INR 10062 Million per year as against cost of just INR 175 Million.
- Gir PA resulted into benefits like increased agricultural productivity and better profitability in surrounding areas due to better irrigation, fodder production for livestock, tourism and indirect benefits of ecological services like soil erosion prevention, effect of hydrological cycle, wildlife habitat, micro-climate amongst others.
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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