Economic Analysis

By: EconomyWatch   Date: 13 October 2010

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Economic analysis is a process whereby the strengths and weaknesses of an economy are analyzed. Economic analysis is important in order to understand the exact condition of an economy.



Macroeconomics and Economic Analysis


Macroeconomic issues are important aspects of the economic analysis process. However, economic analysis can also be done at a microeconomic level.

Macroeconomic analysis gives insight into the fundamentals of an economy - and the strengths and weaknesses of economies.

Macroeconomic analysis takes into account growth achieved by aar economy, or rather a sector of that economy. It tries to reveal reasons behind a particular economic phenomenon like growth or reversal of the economy.



Inflation and Economic Analysis 


Many countries in the world are plagued by rising inflation. Economic analysis tells us why inflation has taken place. It also suggests ways in which the rate of inflation could be reduced, so that economic development could continue. 



Economic Analysis and Government Policies 


Government policies and plans that affect the economy have always been an important part of economic analysis. Since policies and plans adopted by a particular government are responsible for shaping an economy, they are always closely scrutinized by various processes of economic analysis. 



Economic Ratings and Economic Analysis 


Economic ratings are another important aspect of economic analysis, as it provides an accurate picture of how an economy is faring compared to others.


Economic Analysis and Comparison of Economic Policies


It is a good way to analyze an economy by comparing its policies with those of other economies. This is all more applicable in the case of economies that are of similar types, for example developing economies.

World Economic Analysis

In 2008, GDP purchasing power parity and GWP gross world product was estimated to be $70.65 trillion. GDP official exchange rate and GWP gross world product, however was $78.36 trillion as counted in 2008. In world economy, real growth rate of GDP has been found to be 3.8 percent in 2008 and $10,500 was GDP per capita.

Global economic analysis reveals that in 2009 output of global economy increased by 3.8 percent in 2008, which was lower than 5.2 percent, which has been estimated in 2007. Global economic analysis shows that China (9.8 percent), Russia (7.4 percent) and India (7.3 percent) have shown growth. However, there was variation in growth results of Azerbaijan (15.6 percent), Macau (16.6 percent), Angola (15.1 percent), and Afghanistan (13.5 percent) as has been revealed by economic analysis of world. As per economic analysis in world in recent years, growth rate has declined in nations based mainly on industries. It is because of uncertainties in financial markets that growth rates got lowered in most of developing nations. Confidence of consumers has also depreciated to a significant extent.

When it comes to in-depth economic analysis at world, there has been substantial slowdown in flow of international goods, funds, and technology. Regional movements also accelerated economic crunch in present years.

Closer economic analysis for world reveals that there have been separatist regional movements in former Soviet Union, former Yugoslavia, Iraq, India, Indonesia and Canada that have been detrimental to their present day economic growth. Investments and strengthening of incentives to seek employment have slowed down.

World economic analysis also points out that each year more than 80 million people are added to population of world. This accelerates economic problems in global arena. This rise in population has led to severe problems like pollution, desertification, epidemics, underemployment and famine. There are numerous poorer areas in world, which are becoming even more marginalized from an economic point of view.

Global economic condition also talks about making of Euro as common currency of most of countries of Western Europe from January 1999 as being a significant economic move. Contribution to world economy GDP is different for different sectors. In fiscal year 2008, agriculture sector added 4 percent, industrial sector contributed 32 percent and 64 percent was put in by service sector to world GDP.

Unemployment rate, as was found by global economic analysis, was found to be 30 percent, which combines unemployment and underemployment. In developed countries unemployment rate ranged from 4 percent -12 percent. Major export commodities in world include electrical machinery, mineral fuels, nuclear reactors, boilers, and parts, cars, trucks, and buses, scientific and precision instruments, plastics, iron and steel, organic chemicals, pharmaceutical products, diamonds, pearls, and precious stones.

Read more Economic Analysis for major countries on EconomyWatch below.
 

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