Atlantic Meridional Overturning Circulation (AMOC)

Scientists have issued a stark warning about the capacity disintegration of the Atlantic Meridional Overturning Circulation (AMOC). The collapse of the AMOC should have “devastating and irreversible” effects, in particular on Nordic countries (Denmark, Iceland, Norway, Finland, and Sweden).  These areas could revel in severe climate modifications, including enormous cooling and southward shift of tropical monsoon systems, disrupting agriculture and ecosystems globally.

The Atlantic Meridional Overturning Circulation (AMOC) is at risk of imminent collapse, with recent studies indicating that anthropogenic emissions could expedite this between 2025 and 2095.

• • AMOC is a large-scale oceanic circulation system that transports warm surface waters from the tropics to the northern latitudes and returns cold, deep waters from the North Atlantic back towards the equator.
    • It plays a crucial role in redistributing heat globally, influencing regional and global climates, especially moderating temperatures in Europe, North America, and near the Equator.
• Mechanism:
  • Warm Water Transport: AMOC transports warm, salty surface waters from the tropics to the northern regions. These warm waters carry heat energy, contributing to the warming of regions like Europe.
  • Cooling and Density Increase: As the warm surface waters move towards the poles, they gradually cool due to heat loss to the atmosphere. Also, cold, fresh water from the melting ice of the Arctic is added to the cooler ocean.
  • Downwelling: Once cooled, the dense, cold water sinks to deeper layers of the ocean in a process known as downwelling.
    • This downwelling occurs primarily in the North Atlantic Ocean, where the dense water mass forms and begins its southward journey.
  • Southward Flow: The cold, dense water flows southward along the ocean floor, traversing vast distances across the Atlantic basin.
    • This southward flow represents the deep limb of the AMOC, where cold, dense water mass redistributes heat and nutrients throughout the ocean.
    • As the water resurfaces, it begins to warm up again, completing the circulation cycle of the AMOC.

• Role of Indian Ocean: As the Indian Ocean warms faster and faster, it generates additional precipitation. This draws more air from other parts of the world to the Indian Ocean, including the Atlantic. With so much precipitation in the Indian Ocean, there will be less precipitation in the Atlantic Ocean.
• Less precipitation will lead to higher salinity in the waters of the tropical portion of the Atlantic — because there won’t be as much rainwater to dilute it.
• This saltier water in the Atlantic, as it comes north via AMOC, will get cold much quicker than usual and sink faster.
• This would act as a jump start for AMOC, intensifying the circulation.
• Contribution to Global Climate: This cycle acts like a heat conveyor belt, warming the northern latitudes and cooling the southern latitudes, contributing to the overall stability of the Earth''s climate.
• Threat: Rising precipitation and accelerated melting of the Greenland ice sheet have introduced more cold freshwater into the North Atlantic.
• This influx has lowered water salinity and density, causing the colder ocean layer to expand while the warmer layer contracts.
• Consequently, the AMOC is slowing down, posing a risk of collapse.
• Also, anthropogenic activities, such as greenhouse gas emissions, can influence ocean temperatures and circulation patterns, further affecting the AMOC.
• Potential Cascading Effects:
• AMOC collapse may alter precipitation patterns, potentially destabilizing the southern Amazon rainforest and transforming it into a savannah-like ecosystem.
• Increased ocean heat in the southern hemisphere could accelerate the melting of the West Antarctic ice sheet, exacerbating sea-level rise.
• Weakening of monsoon circulation in regions like South Asia and Africa could have far-reaching consequences for agriculture, water resources, and regional climates.

BRICS Summit  2024

• The 16th BRICS Summit concluded with the adoption of the ‘Kazan Declaration’, a comprehensive document outlining key areas of cooperation and the bloc''s unified stance on global issues.

Key Outcomes of the Kazan Declaration

• Under the theme "Strengthening Multilateralism for Just Global Development and Security", the Kazan Declaration emphasised the importance of BRICS solidarity and strategic partnerships. The leaders pledged their commitment to fostering peace, ensuring a fairer international order, and promoting sustainable development.
• The key-outcomes are as follow:

Geopolitical Concerns

• Diplomatic Resolutions for International Conflicts: The summit highlighted the critical need for peaceful resolutions to international conflicts through diplomacy. The declaration underscored the importance of adhering to the United Nations Charter, particularly in relation to the ongoing Ukraine conflict.
• Concerns Over Palestine: The situation in Palestine was a focal point of concern, with the declaration noting the severe humanitarian crisis in the Occupied Palestinian Territory. The BRICS leaders voiced their grave apprehension regarding the escalation of violence in Gaza and the West Bank, calling for immediate measures to alleviate the situation.
• Middle East Crisis: The declaration also addressed the escalating humanitarian crisis in the Middle East, particularly in Southern Lebanon. Leaders condemned the civilian casualties and damage to infrastructure resulting from military actions, urging for a cessation of hostilities.

Global Governance and Multilateralism

• Role of the G20: The importance of the G20 in global decision-making processes was emphasized. The leaders recognized the necessity for the G20 to function effectively, advocating for a consensus-driven approach focused on achieving tangible outcomes.
• Reform of Financial Architecture: The BRICS nations reiterated their commitment to reforming the international financial architecture to enhance global governance. They called for a more agile and representative multilateral system capable of addressing financial challenges, stressing the need for reforms that promote inclusive growth.
• Innovative Financial Practices: The declaration encouraged the exploration of new financial practices, highlighting the BRICS Interbank Cooperation Mechanism (ICM) as a means to facilitate innovative financial solutions.

Economic Cooperation and Local Currencies

• Strengthening Trade in Local Currencies: A significant aspect of the summit was the agreement to enhance trade and financial settlements in local currencies. The declaration welcomed initiatives aimed at utilizing local currencies for BRICS financial transactions and establishing independent cross-border settlement infrastructures.
• BRICS Grain Exchange: The leaders endorsed the initiative to create a BRICS Grain Exchange, which would facilitate commodities trading within the bloc.
• Expansion of BRICS: Recognizing the growing interest from nations in the Global South, the leaders established a BRICS Partner Country category. New members, including Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, are welcomed to join the bloc, indicating a commitment to expanding BRICS influence and partnerships.

Pandemic Preparedness and Environmental Conservation

• Health Initiatives:. Leaders supported initiatives related to vaccine research and development, early warning systems for infectious diseases, and the establishment of a BRICS TB Research Network.
• Addressing Antimicrobial Resistance: The Kazan Declaration acknowledged the threat posed by antimicrobial resistance (AMR), welcoming the outcomes of the UNGA High-Level Meeting on AMR.
• Conservation of Big Cats: India''s initiative for an International Big Cats Alliance received recognition, with BRICS countries pledging to collaborate on the conservation of endangered species.

Cloud Chamber Under Project Mausam

• India is strengthening research in cloud physics, which is crucial for weather modification. Under Project Mausam, a cloud chamber is being established at the Indian Institute of Tropical Meteorology (IITM), Pune.

What Is a Cloud Chamber?

• The cloud chamber was invented by Charles Thomson Rees Wilson in 1911.
• Structure: A cloud chamber resembles a closed cylindrical or tubular drum . Water vapour and aerosols are injected into the chamber.
• Function: Under controlled humidity and temperature conditions, clouds can develop inside the chamber.
• Significance: The facility will allow scientists to study how seed particles form cloud droplets or ice particles.
• This is vital for understanding cloud formation, precipitation, and weather patterns.

Significance Of Cloud Chamber  for India

• Enhancing Weather Prediction: The cloud chamber will enhance the study of cloud physics, crucial for better weather prediction models, especially in monsoon-dependent India.
• Cloud Seeding Research: The chamber and ongoing studies will help develop cloud seeding techniques, which can potentially address droughts and water shortages by artificially inducing rainfall.
• Mission Mausam : It focuses on studying cloud properties with an emphasis on the Indian monsoon.
• India is building the cloud chamber with convection properties essential for studying monsoon clouds.
• Mission Mausam is a ₹2,000 crore initiative by the Union Cabinet to upgrade India’s weather forecasting system.

Cloud Seeding

• Cloud seeding is a technique aimed at artificially inducing rainfall by introducing particles such as silver iodide into clouds.
• These particles serve as nuclei around which moisture can condense, ultimately forming rain droplets.

How Does It Work?

• Seeding Materials: Common materials include silver iodide, potassium iodide, dry ice, or liquid propane.
• Delivery Method: Seeds can be dispersed using aircraft or ground-based sprayers.
• Condensation Process: The introduced particles encourage the condensation of smaller water droplets into larger ones until they become heavy enough to fall as rain.

Applications and Examples

• India: In Solapur, Maharashtra, cloud seeding reportedly increased rainfall by about 18%.
• UAE: The technique has been employed to enhance rainfall in arid regions.

Demands of Ladakh for Statehood, inclusion in  6^th Schedule.

• Ladakh, a region characterized by its unique cultural and geographical landscape, has been at the center of significant political discourse since its transition to a Union Territory (UT) in 2019. The abrogation of Article 370, which previously granted special status to Jammu and Kashmir, led to the bifurcation of the state and the creation of Ladakh as a UT. However, five years later, the region is witnessing widespread protests demanding statehood and greater autonomy. 

Historical Context

• The Abrogation of Article 370: August 2019 saw the abrogation of Article 370 and was a historic time for Ladakh. The Indian government had justified this constitutional change to integrate Ladakh more fully into India in triplication to the local grievances of representation in governance. And yet it abandoned the region’s special status, leaving it open to New Delhi’s direct control and questioned its autonomy and self-governance.
• Formation of Union Territory: Long standing demands by Ladakhis were presented as the reason for creation of Ladakh as a UT, especially in Leh part which had been feeling marginalised by political favours attached towards Jammu and Kashmir. In fact, this change has not been accompanied with responsible governance nor adequate representation of Ladakhis. Instead, it has left locals feeling disenfranchised with no one to speak for them beyond the legislative body they no longer have.

Current Demands of Ladakh

• Demand for Statehood: Statehood is one of the main demands coming out of Ladakh. Residents have pressed for greater autonomy and control over their governance as protests have intensified. There’s no legislative assembly, so the local powers play themselves out without input from local communities. It results in feelings of alienation and frustration. The demand for statehood is an attempt to find self determination and local governance needs.
• Inclusion in the Sixth Schedule: There is another mountain demand for Ladakh to be included in the Sixth Schedule of the Indian Constitution, for all tribal areas, for more autonomy and self rule for them. This would allow the local council to exercise better control over resources, land use and cultural preservation. Ladakh is home to numerous ethnic groups each with different social and cultural identity so including them in the Sixth Schedule will safeguard their identity for sustainable development.

Governance Challenges

• Lack of Local Representation: Ladakh continues to enjoy bad governance in the sense that it does not adequately represent its residents. Without an elected legislative assembly, there is little paying attention to local issues in favor of broader national interests. Such decisions are made without the benefit of input from those most directly affected. The geographic disconnect has led to protests and demands for a more democratic form of governance.
• Security vs. Development: Owing to ongoing tensions with China along the Line of Actual Control (LAC), Ladakh has only been seen from a lens of security since 2019. National security is obviously important, but in the process, there has been too much focus on such important national security without addressing major national issues like livelihoods, environment and civic rights. But these concerns have been left to the sidelines, where they fuel resentment amongst residents who accuse the city of starving their voices for its own security reasons.

The Role of Deliberation

• Importance of Deliberative Processes: Involvement of the local communities in the decision making processes build confidence between residents and the government and in the same way it makes decisions more relevant to the needs of those that are affected. A deliberative approach can reduce the gap between the portrayed national interests and the local realities.
• Mechanisms for Deliberation: To facilitate effective deliberation, several mechanisms can be implemented:
• Community Consultations: By consulting with community leaders and residents regularly, you may gain insights about local issues and priorities that will help you perform your best function.
• Participatory Governance Models: Distribution of power through participatory governance frameworks that enable local councils to effectively represent and account for citizens can be established.
• Feedback Mechanisms: Channels for feedback on government policies can make sure that the government makes the right decisions that accommodate community needs.

Conclusion

• The legitimate demands of Ladakh for statehood and inclusion in the Sixth Schedule reflect broader aspirations for autonomy, representation, and sustainable development.
• As India navigates its complex federal structure, it is crucial to recognize the unique challenges faced by regions like Ladakh. By prioritizing deliberative processes that engage local communities in decision-making, the government can address grievances effectively while fostering a sense of ownership among residents.

Gram Panchayat-Level Weather Forecasting

• The Ministry of Panchayati Raj (MoPR), in collaboration with the India Meteorological Department (IMD), Ministry of Earth Sciences (MoES), is set to launch a landmark and a transformative initiative to provide Gram Panchayats with 5 days daily weather forecasting and provision to check hourly weather forecast – Gram Panchayat-Level Weather Forecasting.
• This initiative is aimed at empowering rural communities and enhancing disaster preparedness at the grassroots.
• It will directly benefit farmers and villagers across the country.
• As part of the Government’s 100 Days Agenda, this initiative strengthens grassroots governance and promotes sustainable agricultural practices, making rural populations more climate-resilient and better equipped to tackle environmental challenges.
• This is the first time that localized weather forecasts will be available at the Gram Panchayat level, supported by IMD’s expanded sensor coverage.
• The forecasts will be disseminated through the Ministry’s digital platforms: 
• e-GramSwaraj, which enables efficient governance, project tracking, and resource management
• Meri Panchayat app, which fosters community engagement by allowing citizens to interact with local representatives and report issues
• Gram Manchitra, a spatial planning tool that provides geospatial insights for development projects.

Euclid Mission

•  Recently, a mosaic was released by the Euclid space telescope. 

ESA’s Euclid Mission

• The ESA’s Euclid Mission is a space telescope designed to explore the composition and evolution of the dark universe. 
• The Euclid mission launched on July 1, 2023 from Cape Canaveral, Florida.
• The Euclid mission’s goals include:
• Creating a 3D map of the universe’s large-scale structure
• Observing billions of galaxies up to 10 billion light-years away
• Exploring how the universe has expanded
• Revealing more about the role of dark matter, dark energy, and gravity
• Destination: The Euclid mission will travel to the Sun-Earth Lagrange Point 2 (L2), 1.5 million km from Earth.

Key Concepts

• Dark Matter: A mysterious substance that makes up a significant portion of the universe. While it has gravitational effects, it does not interact with light or any part of the electromagnetic spectrum, making it invisible.
• Dark Energy: A hypothetical form of energy believed to permeate all of space, causing the accelerated expansion of the universe.

Lagrange Points

• Lagrange points are positions in space where the gravitational forces of two large orbiting bodies, like the Earth and Sun, create regions of equilibrium, allowing a smaller object to maintain its position with minimal fuel usage. 
• There are five Lagrange points (L1, L2, L3, L4, L5).
• L1: Offers an uninterrupted view of the Sun, making it ideal for solar observations. It’s home to the SOHO space telescope (joint NASA and ESA mission to study the Sun) and India’s Aditya L1 mission.
• L2: Ideal for astronomy, as spacecraft located here can communicate with Earth, harness solar power, and have a clear view of deep space. This point is home to both the James Webb Space Telescope and the Euclid Telescope.
• L3: Located behind the Sun and is less useful due to communication challenges.

L4 and L5: These points are stable. Objects orbiting these points are called Trojans, after three large asteroids (Agamemnon, Achilles, and Hector) found there.

India’s First teal Carbon Study

• India’s first study on ‘teal carbon’,  was undertaken at Keoladeo National Park (KNP) in Rajasthan’s Bharatpur district. 

Collaboration and Research

• The study was conducted by the Central University of Rajasthan, in collaboration with international researchers from the U.S. Environmental Protection Agency (EPA) and Kenyon College.
• Research at KNP focused on assessing the status and role of teal carbon in combating climate change 

Teal Carbon

• Teal carbon refers to carbon stored in non-tidal freshwater wetlands, including vegetation, microbial biomass, and organic matter.
• It differs from black and brown carbon, which come from incomplete combustion of organic matter and contribute to global warming.

Colour-Based Classification of Carbon

• Scientists classify carbon into different types based on its function, characteristics, and location in the carbon cycle. Here are the main types:

Types of Carbon

• Purple Carbon: Carbon from air or industrial emissions.
• Blue Carbon: Carbon stored in marine plants and sediments.
• Teal Carbon: Carbon stored in freshwater and wetland environments.
• Green Carbon: Carbon stored in terrestrial plants and forests.
• Black Carbon: Carbon emitted from burning fossil fuels.
• Grey Carbon: Carbon from industrial emissions.
• Brown Carbon: Carbon from the incomplete combustion of organic matter.
• Red Carbon: Carbon released through biological particles on snow and ice, reducing albedo.

Challenges Faced by Teal Carbon Ecosystems

• Anthropogenic activities: Pollution, construction, and land use changes threaten wetland health.
• Methane emissions: Wetlands can emit methane, a potent greenhouse gas.
• Hydrological fragmentation: Many wetlands are being degraded and fragmented.

Teal Carbon’s Role in Climate Change Mitigation

Effective Carbon Storage

• Wetlands, especially peatlands, store carbon more efficiently than forests.
• Peatlands can store up to 40 times more carbon than tropical forests.
• This helps lower CO2 levels in the atmosphere, reducing global warming.

Regulating Greenhouse Gases

• Wetlands both absorb CO2 and emit methane, a powerful greenhouse gas.
• The overall impact depends on the type and condition of the wetland.
• Properly managed wetlands act as carbon sinks, aiding climate mitigation.

Enhancing Climate Resilience

• Wetlands influence temperature, rainfall, and humidity, helping to regulate local climate.
• They provide protection from floods and droughts, acting as natural buffers.
• Wetland conservation increases resilience against climate change impacts.

Supporting Biodiversity

• Wetlands are home to a wide variety of plants and animals, conserve and protect Biodiversity and keeps ecosystems healthy.

 Findings of the study

Methane Emissions

• The study found high levels of methane emissions in the wetlands at KNP.
• The use of specialised biochar, a type of charcoal, could help reduce these emissions.
• Biochar is a carbon rich material made from organic sources like wood and plants. 
• It is produced through a process called “pyrolysis”. 
• Pyrolysis is a process of heating organic matter at a low temperature. 

Environmental Threats

• Degraded wetlands can release harmful gases like methane and carbon dioxide.
• Urgent conservation efforts are needed to prevent further degradation.

Conservation Recommendations

• Effective water management and planting of suitable vegetation are necessary to sustain teal carbon pools.
• Proper conservation would also benefit groundwater levels, flood control, and help reduce urban heat islands.

SC Upholds States'' Right to Regulate Industrial Alcohol

• In a big victory for states, the Supreme Court (SC), in an 8:1 majority, upheld the states’ right to regulate taxes on industrial alcohol, overruling a 1990 judgment.

Background of the Case (Issue Before the Court)

• The core of the dispute arises from two “overlapping” entries in the Seventh Schedule of the Constitution, which lays down the division of lawmaking powers between the Centre and the states.
• The case revolves around the interpretation of Entry 8 of List II (State List) and Entry 52 of the Union List in the Constitution.
• Entry 8 of List II (State List) gives states the power to regulate “the production, manufacture, possession, transport, purchase and sale of intoxicating liquors”
• Entry 52 of List I (Union List) allows the Centre to regulate industries as a whole to the extent “declared by Parliament by law to be expedient in public interest”.

Centre VS States Arguments

• Centre: As alcohol and other products of fermentation industries that deal with non-potable (non-drinkable) alcohol are included in the Industries (Development and Regulation) Act, 1961. The Centre argued that it “occupied the field” when it comes to industrial alcohol, and that states could not regulate the subject.
• States: States, on the other hand, argued that industrial alcohol can be misused to produce consumable alcohol illegally, which required them to enact legislation.
• The Supreme Court needed to address whether "industrial alcohol" or denatured spirits could be classified under the term "intoxicating liquor," thus allowing states to regulate and tax it.
• The controversy traces back to a 1990 Supreme Court judgment in Synthetics & Chemicals vs. State of Uttar Pradesh, which limited the definition of "intoxicating liquor" to potable alcohol, ruling that states could not tax industrial alcohol.
• The current case revisited this ruling, with the Supreme Court considering its implications on state powers and public health concerns.

Key-takeaways from Supreme Court’s Ruling

• Definition of Intoxicating Liquor: The Supreme Court ruled that "industrial alcohol" falls within the meaning of "intoxicating liquor" under Entry 8 of List II of the Constitution. This broader interpretation allows states to regulate and tax industrial alcohol.
• The definition of "intoxicating liquor" extends beyond just alcoholic beverages suitable for human consumption. It includes all types of alcohol that could pose risks to public health.
• The court stated, “Alcoholic liquor is defined by its ingredients, and ‘intoxicating’ is defined by its effects.” This emphasis on public health reinforces states’ obligations to prevent misuse of industrial alcohol.
• Overruling of Previous Judgment: The court overruled the earlier decision in Synthetics & Chemicals, asserting that the Entry 8 of List II cannot exclude raw materials used in producing intoxicating liquors. The Bench highlighted the necessity for states to enact regulations to prevent industrial alcohol from being misused as a consumable liquor.
• Legislative Powers: The ruling confirms that the subject of intoxicating liquors falls exclusively within state jurisdiction, allowing state legislatures to enact laws addressing the production, transport, and sale of industrial alcohol. This grants states greater autonomy to combat illegal consumption and regulate alcohol-related activities.
• The judgment empowers state governments to introduce more stringent regulations on industrial alcohol, potentially leading to changes in how it is produced, transported, and consumed. 

Visa-Free Kartarpur Corridor

• In a rare move of cooperation, India and Pakistan have agreed to extend the visa-free Kartarpur Corridor for another five years.

Details about Gurdwara Darbar Sahib Kartarpur

• Gurdwara Darbar Sahib Kartarpur, often called just Kartarpur Sahib, is one of the holiest shrines for Sikhs.
• That is because Sikh Guru, Guru Nanak Dev (the founder of Sikhism) preached there during the last eighteen years of his life.
• In Kartarpur Sahib, Guru Nanak passed away in 1539.
• After Partition of India in 1947, Kartarpur Sahib fell on the Pakistan side of the International Border. It is located in Shakargarh Tehsil, Narowal District, in Pakistan''s Punjab Province.
• With India being the home for more than 95 per cent of all Sikhs globally, pilgrims from all over India always demanded access to go to Kartarpur Sahib.
• The Kartarpur Corridor was opened in 2019.
• The Corridor facilitates Indian Sikhs'' access to the Gurdwara Darbar Sahib in Pakistan.
• The corridor allows pilgrims to make the journey without a visa, crossing from India to Pakistan in a symbolic act of religious freedom and cooperation.

World Economic Outlook

•  The International Monetary Fund (IMF) maintained its June growth rate projection for India at 7% for FY25 in its latest released World Economic Outlook (WEO).

Key Highlights of the World Economic Outlook

• Global Growth Projections: Global growth is projected to be 3.2% for both 2024 and 2025.
• The global economy has shown resilience despite inflation and external challenges.
• Inflation Trends: The battle against inflation is nearly won. Inflation peaked at 9.4% in Q3 of 2022.
• It is expected to fall to 3.5% by the end of 2025, nearing central bank targets in most countries.

Geopolitical and Economic Risks:

• Geopolitical conflicts (e.g., in the Middle East), which could disrupt commodity markets.
• Rising trade tensions and shifts toward protectionist policies.
• A potential reduction in migration to advanced economies, which could unwind some of the supply gains helping to ease inflation.
• These factors could reduce global output by 1.6% by 2026.

Fiscal Challenges and Debt Management: 

Urgent need to stabilize debt dynamics and rebuild fiscal buffers, especially in the United States and China.

• Current fiscal plans are not sufficient to stabilize debt in several countries.
• Delayed action on debt reduction could lead to disorderly adjustments.
• Excessively abrupt fiscal tightening could harm economic activity.
• Warning on Market Pressures: High debt levels combined with high interest rates pose a risk.
• If fiscal policies are not credible, market pressures may force abrupt and uncontrolled adjustments.
• Countries must act proactively to avoid being at the mercy of market forces.
• Triple Policy Pivot: The IMF suggests a three-part policy approach to respond to the global economic challenges:
• Neutral monetary policy stance: A shift towards balanced monetary policies, which many countries are currently adopting.
• Fiscal consolidation: Building fiscal buffers after years of loose fiscal policy.
• Structural reforms: To boost growth and productivity, address the ageing population, and tackle the climate transition

Key Highlights On Indian Economy

• This outlook highlights India’s position as one of the fastest-growing major economies, though there are challenges to sustaining high growth rates amid global uncertainties.
• India’s growth rate at 7%  remains higher than global growth projections, with the world economy projected to grow at 3.2% for 2024 and 2025.
• For the following year, FY 2025-26, the growth rate is expected to be 6.5%.
• The decline from 8.2% in 2023 is attributed to the exhaustion of pent-up demand from the pandemic period, as the economy reconnects with its potential.
• In contrast, the U.S. economy is expected to grow at 2.8% this year and 2.2% next year.

IMF

• Established in the aftermath of the Great Depression of the 1930s at Bretton Woods Conference in 1944.
• It is one of the United Nations (UN) specialised agencies.
• Main objectives:  Include supporting global monetary cooperation, securing financial stability, facilitating international trade, promoting high employment and sustainable economic growth, and reducing poverty.
• Economic surveillance : IMF keeps track of the economic health of its member countries, alerting them to risks on the horizon and providing policy advice.
• Lender of last resort:  Lends to countries with balance-of-payments difficulties.
• It also provides technical assistance and training to help countries improve economic management. 
• Headquarter : Washington, DC.
• Reports by IMF: Following reports are  usually prepared twice a year April and October.(Global Financial Stability Report, World Economic Outlook)

IMF Quota Subscription 

• Quota Subscription: Each IMF member contributes a financial amount based on its economic size and wealth.
• Quota Review: Quotas are reviewed every five years and are linked to each country’s wealth and economic performance.

Quota Formula:

• GDP (50%)
• Openness (30%)
• Economic Variability (15%)
• International Reserves (5%)
• Richer Countries: Countries with larger economies, like the U.S., contribute more to the IMF. The U.S. has the largest quota, reflecting its economic dominance.
• Special Drawing Rights (SDR): Quotas are denominated in Special Drawing Rights (SDRs), an international reserve asset created by the IMF.
• SDR Value: Determined from a weighted basket of major global currencies, including: U.S. Dollar ,Euro ,Japanese Yen ,Chinese Yuan ,British Pound

Quota’s Role:

• Loanable Funds Pool: Quotas contribute to a pool of funds that IMF members can borrow from.
• Borrowing and Voting Power: The size of a country’s quota influences how much it can borrow and its voting power in IMF decisions.
• Reserve Tranche Position: Reserve Tranche (also called “Gold Tranche”) is a portion of a member’s quota that can be accessed without stringent conditions or service fees.
• Calculation: The Reserve Tranche Position is the difference between the IMF’s holdings of a country’s currency and the country’s IMF quota.