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Introduction
What is an 'Economic Indicator'?
An economic indicator is a collection of economic data, majorly at macroeconomic scale, that is
used to interpret current or future investment possibilities or to predict the health of an
economy.
The Economic Indication as economists says a secret weapon which is open source for all the
mass throughout with government websites and different indicators calculating organizations
results. The more the data one can infer from these indicators the more one knows about the
health of an economy. The indicators includes- human development index, foreign direct
investments, consumer price index (CPI), gross domestic product (GDP), unemployment figures
and the price of crude oil and the list is limited one.
Economic indicators analyses the health and divergence of the economy. The employment
report states the size of the nation's workforce, the types of careers and choices people have,
and even how many people belong the working force of the nation are the examples to name a
few where these indicators could help. Moreover, by comparing the results to past periods,
you can illustrate if those numbers are getting stronger or weaker.
The information which the various indicators display have far-reaching implications for
businesses, employees, and the economy as a whole.[1]
economydetail.blogspot.in/2010/02/indicators-of-economic-development.html
Is it a right time to start a business when incomes are rising? Looking for jobs could be more
fruitful when most people are employed.
Measurement of economic development and express in definite index is very difficult task in
economics. So many opinions are found to indicate level of economic development of a nation.
Growth rebounded in 2014 through 2016, exceeding 7% each year. Investors perceptions of
India improved in early 2014, due to a reduction of the current account deficit and expectations
of post-election economic reform, resulting in a surge of inbound capital flows and stabilization
of the rupee. Since the election, the government has passed an important goods and services
tax bill and raised foreign direct investment caps in some sectors. Despite a high growth rate
compared to the rest of the world, in 2015 and 2016, Indias government-owned banks faced
mounting bad debt, resulting in low credit growth and restrained economic growth. [2]
www.indexmundi.com/factbook/compare/india.china/economy
Comparing Indias economic growth with China with the following Economic Indicators:
INDIA
China has a very High Human Development Index which is at 12, whereas India has medium
Human Development Index at 131.
Ease of Doing Business
Economy Rankings
Economies are ranked on their ease of doing business, from 1190. A high ease of doing
business ranking means the regulatory environment is more conducive to the starting and
operation of a local firm. The rankings are determined by sorting the aggregate distance to
frontier scores on 10 topics, each consisting of several indicators, giving equal weight to each
topic. The rankings for all economies are benchmarked to June 2017. [6] Website: World Bank
Group- www.doingbusiness.org/rankings
A high ranking means that the regulatory environment is conducive to business operation.
YEAR 2017
Country FDI
India 1108 USD Million
China 940.13 USD HML
* Source - tradingeconomics.com: Central Statistical Organization
According to Department of Industrial Policy and Promotion (DIPP), the total FDI investments
India received during April-June 2017 stood at US$ 14.55 billion, indicating that government's
effort to improve ease of doing business and relaxation in FDI norms is yielding results.
Data for April-June 2017 indicates that the services sector attracted the highest FDI equity
inflow of US$ 1.88 billion, followed by computer software and hardware US$ 1.32 billion and
trading US$ 769 million. Most recently, the total FDI equity inflows for the month of June
2017 touched US$ 3.12 billion.
During April-June 2017, India received the maximum FDI equity inflows from Mauritius (US$
3.29 billion), followed by Singapore (US$ 3.01 billion), Germany (US$ 798 million), USA (US$ 660
million), and Netherlands (US$ 584 million).
Indian impact investments may grow 25 per cent annually to US$ 40 billion from US$ 4 billion
by 2025, as per Mr Anil Sinha, Global Impact Investing Network's (GIINs) advisor for South
Asia. [8]
www.ibef.org/economy/foreign-direct-investment
Unemployment Rate
The degree to which society can provide employment to those who seek employment is one of
the most important indicators of the well-being of any society. Therefore, the unemployment
rate, which measures the inability to provide such employment becomes the most important
indicator to measure the health of a modern economy.
The larger the proportion of productively employed labour force of a population, the greater
the well-being of society. A society where a large proportion of the labour force is employed
provides respite from poverty and vulnerability. It also motivates households to spend more to
improve their quality of life. In doing so, households propel economic growth and more
employment.
An increase in unemployment on the other hand, reduces aggregate spending power, slows
down the economy and most importantly, it increases the vulnerability of households to deal
with economic shocks. [9]
http://www.bseindia.com/bsecmieindices/unemployment.aspx
Thus unemployment rate is one of the most important indicators of an economy. In an ever
changing world it is important to have such an indicator at fast-frequency so the corrective and
preventive actions can be taken without wasting time.
Job creation in India is not expected to pick up pace in 2017 and 2018 as unemployment rises
slightly, representing a near stagnation in percentage terms.
"Unemployment in India is projected to increase from 17.7 million last year to 17.8 million in
2017 and 18 million next year. In percentage terms, unemployment rate will remain at 3.4 per
cent in 2017-18," according to the United Nations International Labour Organization (ILO).[10]
http://www.businesstoday.in/current/economy-politics/unemployment-in-india-to-increase-
marginally-in-201718-report/story/244145.html
S & P Ratings
The S&P rating is a credit score that describes the general creditworthiness of a company, city
or country that issues debt. The Standard and Poor's company rates how likely a debt will be
repaid. The ratings are for information only. They aren't investment recommendations nor do
they predict the probability of default. S&P also rates the creditworthiness of individual bonds.
Here's more about the different types of bonds.
S&P ratings helps to decide whether to buy a bond or not. It is also relevant to know how a
countrys economy is being performing. This helps in investments like foreign stocks and forex
trade.
S&P classifies all debt-issuing entities they review according to the following scale: [11]
https://www.moneycrashers.com/what-is-sp-credit-ratings/
AAA, AA+, AA, and AA- (Very High Capacity to Repay Loans)
A+, A, and A- (Strong Capacity to Repay Loans)
BBB+, BBB, and BBB- (Adequate Capacity to Repay Loans)
S&P publishes ratings for 130 countries. The company analyzes how likely it is that a country
will default on its sovereign debt. It bases this on its analysis of four factors. It looks at whether
the country's government is stable and follows sustainable fiscal policies. It reviews the
country's economic strength and its growth prospects. It takes a look at foreign direct
investment. The analysts give an opinion on whether the nation's central bank is independent
of its government and uses good monetary policy. [12]
(Source: "Global Sovereigns," S&P Global Ratings.)
S & P Ratings
India China
BBB- AA-
Below are comparative economic indicators to know where Indian and Chinese economy stands
Trade
Source: https://countryeconomy.com/countries/compare/china/india