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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..
Growth Indicators cont..(National income)
GNP= GDP- NFIA (Net Factor Income from Abroad)
Growth Indicators..(National income)
NDP (Net domestic product) Total value of production minus
the value of amount of capital used in producing that output..
Growth Indicators..(National income)
NDP = GDP - Depreciation
Growth Indicators cont..(National income)
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
Growth Indicators cont..(National 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)