Economy of India | India China economy comparison |GDP of India |India globalization |Indian economic sector |Economic indicators
Economic indicator is actually statistical data showing general trends of a country’s economy. Economic trends with predictive value are the leading indicators, those that occur simultaneously with any other related economic activity are coincident indicators and those that are gauged after the activity are called lagging indicators. Apart from these, there are also the business indicators.
Economic indicators of a country are necessary as they give an exact status of the country’s economy at any given point of time. Gross domestic product, international trade, official development assistance, national savings, income distribution all these are economic indicators. These economic indicators help in analyzing the country’s economy in an effective manner.
Some other economic indicators are growth of exports, power generation, coal production, crude oil production, railway passenger traffic, nuclear energy generation, railway freight traffic, total road length, telephone connections, iron ore export, exports of electronics and computer software, exports of decentralized cotton, food grains production, production of sugarcane, cotton, oilseed, cement and nitrogenous fertilizers.
Now let us very briefly go through the major economic indicators. Gross domestic product (GDP) measures the total output of goods and services within the country. GDP is often positively correlated with standard of living. To measure the GDP of a country there are three approaches, the product approach, the income approach and the expenditure approach.
Under international trade, there are various economic indicators. Exports and imports of goods and services represent the value of all goods and services provided to or received from the entire world. The goods and services include value of freight, merchandise, insurance, travel, transport and also other services such as construction, communication, business and information. Balance of trade is another economic indicator and it is the net exports of goods and services for a particular country. If a country’s exports exceed its imports then the country is said to have surplus trade and is looked upon as a positive sign. When imports exceed exports the trade balance is said to be negative.
Similarly, under official development assistance we have the records of all international aids received by a country. And there is current balance account under financial flows. Current account balance is the sum of net exports, goods, services, net income, and net current transfers. This data is usually based on the data reported by the International Monetary Fund (IMF).
National savings is another economic indicator. Gross national savings, net national savings and adjusted national savings are calculated to gauge the economic parameters of a country. The national poverty rate, which is the percentage of population of a country earning less than the country’s national poverty line, is also an important economic indicator. Rate of inflation is also a major indicator.
Economic indicators have also been classified into different categories, such as, social development indicators, socio-economic indicators, debt indicators, macro-economic performance indicators, fiscal indicators, market prices of commodities and index of infrastructure.
Economic indicators indicate the direction of an economy. It provides the people a general perspective of how the economy is performing currently and also provides a glimpse of where it could be leading in the future.