Mahngai Dar: russia ukraine war and coronavirus (covid 19) has disrupted supply chain and caused higher inflation in america europe including india affecting economic growth rate
You must have known Parle G Biscuit. While we were in lockdown, the news came that Parle ji’s packet has become small. It became a topic of discussion across the country. This packet of five rupees was so popular that instead of increasing the price, the company reduced the size of the packet. The problem of shortening the packet came because the cost of making biscuits increased. It will take decades to compensate for the difficult times the whole world went through during Corona. The pandemic has pushed us back a lot. Our GDP in 2020-2021 was minus 6.6 percent. This year it has increased to 8.7 percent, even then what is the good news. An increase from minus 6.6 to 8.7 shows only 2% growth. Be it the Asian financial crisis of 1997 or the terrible recession that followed Lehman Brothers in 2007, we fought both and moved on. The new dawn of this year also marked a new beginning. With a bumper growth rate of 13.5% in the first quarter. But on February 24, Russian President Vladimir Putin attacked Ukraine in the name of Special Army Operation.
The pandemic has pushed us back a lot. Our GDP in 2020-2021 was minus 6.6 percent. This year it has increased to 8.7 percent, even then what is the good news.
Alok Kumar
During the Corona period, there was a brake on the supply chain, then the price increased and now this war has complicated the matter. Right now the paddy has to be planted as much as it should, but we have faced the crisis of urea in Bihar, UP, MP, Rajasthan and southern states. Farmers used to queue up and fertilizers disappeared within minutes. Initially, the government refused, but later it was believed that there was some crisis. After this, the price of petrol, diesel, air fuel all started rocketing. In simple language, trucks and trains running on petrol and diesel also started bringing inflation to the destination. You will say that railway lines have become electric. Then know that 75 percent of electricity is still generated from coal and good coal comes from Australia, whose prices have increased due to reduced supply.
Fighting against Corona and war is not easy
Now every day new news comes from some country or the other. In breaking format that highest inflation since 1970, customer sentiment level at low level, commodity prices at highest level till date. McKinsey did research on this. Where is inflation happening? For example, the inflation rate in Lithuania has reached 15.5%. Here we tell you an interesting fact. Hungary started printing notes in 1923. The notes became so much that the inflation rate reached 98%. Now let’s go straight to 2022. This year it went up to 54% in Turkey. All of Europe is troubled and America too. In India too, after a decade, the figure of seven percent kept on crossing.
When the world started to panic due to inflation, the Reserve Bank of all countries started raising interest rates. Also grew in India. But still, in many countries, the rate of inflation is much faster than the rate of interest. Meaning the attack on Koran and Jung is not so easy. Our country saw an impact in the last three months but the August figures have disturbed us. Petrol is below 100 rupees a liter in Delhi but beyond 100 in many states. We do not have food crisis but there is shortage of food grains in many countries because there is no supply from Ukraine. So we have banned the export of flour and rice because we have to see our home first.
Russia-Ukraine war made the situation worse
Others’ homes are becoming very expensive. Real estate prices are increasing in Europe and OECD (Organization of Economic Cooperation and Development) countries. It is a group of 38 countries which includes most of the European countries. There are also some South American countries such as Mexico and Colombia. Flat prices have increased the most in Turkey. Then in Lithuania and the Czech Republic. Investment experts always recommend investing in commodities when inflation is going high. Why would you think? This is because raw materials are needed for economic expansion or development. The demand for raw materials gives an idea of where its prices are going. When the US and NATO imposed a ban on Russia, Russia stopped gas from the Nord pipeline. There was panic in Italy and Germany. Prices are going sky high. We are friends with Russia, but the transportation cost increased when the route of bringing the goods changed. The result of this is the increase in the prices of fertilizers.
Ukraine is considered the grain bowl of the world where the fields are on fire. Now the prices have increased so much that the UN index is broken. Meaning, ever since the United Nations Food and Agriculture Office has created the price index, the price has never increased so much. The future is worse. According to the UN, the production of food grains in the whole world will be less by 40 million tonnes this year. Paddy production is estimated to be 2.1% lower. Monsoon, which is behaving strangely in our country too, remained weak in UP, Bihar, Bengal and Odisha, due to which the paddy crop has been affected. In poor countries like Ethiopia, Sudan, Nigeria, Yemen, the Hunger Index is very high. What has happened to Sri Lanka is in front of all of us. No matter how much money we earn, if inflation starts rising like Venezuela and Zimbabwe, then we will know that we are buying a roti for 5000 rupees. Of course India’s condition is strong but many other countries of the world are in conditions like Sri Lanka. The international fraternity will have to work together for this.
