Countries spending more on 'instruments of war than on investments in peace': UN, Pg13

Key Highlights:

• UN Secretary-General António Guterres warned against rising global military expenditure diverting funds from social spending amid subdued global growth.
• Donald Trump proposed increasing the US military budget for 2027 to $1.5 trillion, funded by revenue from US tariffs.
• Global military expenditure in 2024 saw the steepest annual increase since 1988, reaching $2.7 trillion.
• The UN upgraded India's growth forecast for 2026 by 20 bps to 6.6 per cent, expecting further growth to 6.7 per cent in 2027.

Detailed Insights:

• Strategic rivalries are undermining multilateralism, fragmenting markets, and disrupting global trade and investment.
• Competition for critical minerals is exploiting weak governance and social cohesion, leading to uncertainty and division.
• The top 10 military spenders account for approximately 75% of the total global military expenditure.
• Increased military spending threatens long-term investment in human capital, infrastructure, and development cooperation.
• India's growth is supported by resilient consumption and strong public investment, offsetting the impact of US tariffs.
• Recent tax reforms and monetary easing are expected to provide additional near-term support to India's economic growth.
• The US Congress approved a budget of $901 billion for 2026.

Key Concepts Involved:

• Multilateralism: Cooperation among several countries on a given issue.
• Fiscal Policy: Government spending policies that influence macroeconomic conditions.
• Monetary Easing: Actions by a central bank to increase the money supply and lower interest rates.