macro & micro indicators of business environment

Macro & Micro Indicators of Business Environment

GROWTH INDICATORS

National income Sector wise share Industrial production Agriculture production Inflation rate

GROWTH INDICATORS..

Capital Investment Retail trade turnover Industrial producers price

index Exchange rate Employment Foreign trade

Growth indicators..

NATIONAL INCOMEVersions of national income: GDP GNP NDP NNP

Growth Indicators..(National income)

GDP (Gross Domestic Product): Value of all the final goods &

services produced within the country’s geographical territory, irrespective of the ownership of resources.

Growth Indicators cont..(National income)

GNP (Gross National Product) Income produced through the

country’s owned resources, irrespective of the place of production..


GNP= GDP- NFIA (Net Factor Income from Abroad)


NDP (Net domestic product) Total value of production minus

the value of amount of capital used in producing that output..


NDP = GDP - Depreciation


NNP (Net National Product) It is the total income produced

through the country’s owned resources minus the value of capital consumed in generating that income


NNP = GNP - Depreciation

Growth indicators..

Sector wise SharesIn Industrialized countries service sector makes the maximum contribution..(generally exceeding 60%)

Growth indicators..

Agricultural output The level of agricultural output is a

key indicator of macro economic analysis..

Industrial Production Contribution by different industries

in total industrial production..

Growth indicators..

Inflation

A process in which the general price index records a sustained & appreciable increase over a period of time.

Inflation..

Type of inflation Inflation rate (%)

CREEPING 2-5

WALKING 5-10

RUNNING 10-20

GALLOPING 20-50

HYPER 50 & Above

Growth indicators..

Capital investment: Domestic & foreign investment..

Retail trade turnover: Revenue of retail trade..

Growth indicators..

Exchange rateThe price of one unit of a currency in terms of the number of units of another currency.

Infrastructure Power, telecommunications, roads,

railways, cargo handling etc..

Growth indicators..

Employment Rate of employment & quality of

human resourcesForeign trade Foreign trade as a percentage of

national income is commonly used as a measure of a country’s openness to globalization.

Growth indicators..

FOREX RESERVES Consists of foreign currency assets,

gold holdings of central banks & SDR’s..

Forex reserves indicate the ability of a country to:

Pay of imports Discharge external liabilities Raise fresh borrowings

Measuring Development..

HDI (Human Development Index):

Devised by the UNDP to measure the economic achievements of the nation in combining economic growth & social welfare.

Human development index..

Based on 3 major factors:1) Life expectancy at birth2) Levels of educational attainment3) Gross domestic product per

capitaHDI is essentially a score between 0

& 1.

Development indicators..

GDI (Gender development index)

GEM (Gender empowerment measure)

HPI (Human poverty index)

Indicators of globalization Foreign Direct Investment Foreign portfolio investment Trade Global governance by international

organizations like WTO Business restructuring

Flexibility Closeness to markets Diversification

Goldman Sachs Economic Research Report

By 2050, the BRICs ( Brazil, Russia, India, China) economies together could be larger in U.S. dollar terms than the G-6. (U.S, Germany, Japan, U.K., France and Italy)

macro & micro indicators of business environment

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