How to Evaluate A Country’s Economic Performance

A few simple points.

What to look for

Remarks

References

The Industrial Production Index

Perform Year-On-Year comparison (eg changes between last year and this year), and read in conjunction with Total Trade, Total Exports and Total Imports

 

Total Trade, Total Exports, Total Imports

Perform YoY comparison. Total Exports provide indication of demand for the country’s produces/services while Total Imports reflect strength of domestic demand.

 

GDP Growth
Revenue Growth
Profit Growth

One has to keep running to maintain one’s spot in a highly competitive world. These growth rate indicators show how much a country and businesses in the country are maintaining its position. Sectorial breakdown of growth figures is important to understand which industry is driving the growth.

 

Capital Expenditure
New Hires

These indicators show how much businesses in a country are expanding their production capacity.

 

Inflation Rate
Interest Rate

These indicators reflect the cost of living and the cost of running businesses in the country

 

Currency Exchange Rate

The rise and fall of a country’s currency against other currencies is a reflection of international confidence in the country’s economy (amongst other factors). It also indicates the competitiveness of the country’s exported products (a lower exchange rate means its products are cheaper).

 

Stockmarket Indices

A country’s stockmarket performance is an indication of investors’ confidence in the country’s economy

 

Unemployment Rate
Unemployment Claims

It is assumed that in a healthy economy, more people will be employed. Conversely, higher employment creates more consumer demand, which generates economic activities.

 

Savings Rate
Direct Investments
Foreign Direct Investments

These indicators reflect how much capital is being spent to increase a country’s production capacity, which will lead to future economic growth

 

 

 

 

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