ANALYSIS OF DIFFERENT

COUNTRIES ON BASIS OF
DIFFERENT ECONOMIC
INDICATORS

SUBMITTED TO: SUBMITTED BY:

Dr. Kiran Mehta PAARTH AHUJA
2120982585
ANEESH MITTAL
2120982516
COL. AMAR PARKAR
2120982515
 INTRODUCTION
Fundamental analysis is a method of measuring a stock's intrinsic value. Analysts who follow
this method seek out companies priced below their real worth. This form of analysis is based
on external events and influences, as well as financial statements and industry trends. An
economic indicator is a piece of economic data, usually of macroeconomic scale, that is used
by analysts to interpret current or future investment possibilities. These indicators also help to
judge the overall health of an economy. Economic indicators can be anything the investor
chooses, but specific pieces of data released by the government and non-profit organizations
have become widely followed. The economic indicators taken by us our as follows:
• GDP
• GDP GROWTH RATE
• POPULATION
• POPULATION ANNUAL GROWTH RATE
• EXCHANGE RATE
• FDI
• EASE OF DOING BUSINESS
• INFLATION RATE
• LENDING INTEREST RATE
• UNEMPLOYMENT RATE

ANALYSIS

 GDP: Gross domestic product of a country refers to the total of goods and services
produced within the domestic territory of the country during a particular period of
time. It can be seen that the US has the highest GDP of 20.95 US bn dollars but it can
be seen that its GDP over the last 10 years have been stable and not increasing
significantly. While on the other hand it can be seen that GDPs of India and China
currently are 2.66 US bn dollar and 14.72 US bn dollar and are also increasing at a
very good pace. GDPs of other countries like Japan, Korea and France have also
shown good numbers but they are not increasing very significantly. GDP of
Venezuela showed very good numbers in the year 2011-14 but after that it has
constantly declined and same is the case for Sri Lanka. So, in this parameter it can be
said that China is the best performer.
 GDP growth rate: Annual GDP growth rate is also known as the Economic Growth
rate and it measures the change in the GDP of the country in comparison to an earlier
period, measured in percentage which serves as a determinant of economic health in
the country and possible growth in the future. In 2020 China has showed the best rate
 that is 2.34%. In the year 2019 when there was no Covid China had a growth rate of
5.95% which is a good sign but it should also be noted that this rate had slipped from
9.55% in 2011. Growth rate of US economy has showed a stagnant growth rate over
the last 10 years around 2%. GDP growth rates of Japan, Korea and France have
shown less deviation in the last 10 years. GDP growth rates of Venezuela and Sri
Lanka have declined considerably. Rate of Venezuela has entered into negative
figures while that have Sri Lanka have fallen to 2.25% in 2019 from 8.4% in 2011.
Growth rate of India has also shown good numbers and it currently stands at 4.04%
and is also increasing at a good pace. As growth rate of China is 5.95% and that of
India is 4.04%, still India has performed best in this parameter as there is Growth rate
is increasing every year except in the year 2019 and 2020.
 Exchange rate: An exchange rate is the value of one nation’s currency versus the
currency of another nation or economic zone. China has an exchange rate of 6.90 and
it has remained constant over the last 10 years. Korea has the highest exchange rate of
1180 which means that they have to pay more for their imports and it also discourages
the investors in that particular economy. Exchange rate of Japan and India have rose
considerably from 79 to 106 and from 46 to 74 in the year 2020. Sri Lanka has
performed very poor on this parameter as their exchange rate has increased to 185 in
2020 from 110 in the year 2011. It is always favorable that exchange rate should be
low because if it rises it leads to inflation in that country and it should be more stable
so that investors can have confidence in the country and make investments. So, on the
basis of this it can be said that China is best performer in this category.
 FDI (Net): FDI net inflows are the value of inward direct investment direct
investment made by non-resident investors in the reporting economy, including
reinvested earnings and intra company loans, net of repatriation of capital and
repayment of capital and repayment of loans. USA and China are getting the highest
Foreign direct investments as compared to other companies. But the flow of FDI in
China and USA are not stable, in some years it is increasing while in others it is
decreasing. Japan and France have also shown the characteristics but their share has
been low as compared to US and China while in North Korea it has declined over 10
years. Sri Lanka is also facing the same issue of declining FDI while in Venezuela it
has entered into negative factors. On the other hand, India has shown positive
numbers of FDI and it has increased to almost 2x from year 2011 to 2020. So it can be
said that India is the best performer in this parameter.
 Ease of doing Business: Ease of doing business is an index published by the World
Bank. It is an aggregate figure that includes different parameters which define the
ease of doing business in a country. Currently USA and Korea are on 6th and 5th
position and both have done well to maintain their position from year 2016-2020 but
both have slipped from their 4th and 2nd position respectively in year 2011. Japan and
France are also performing well in this index as both have them are able to maintain
their position over the last 10 years. Venezuela and Sri Lanka have shown poor
figures as they are still at 188th and 99th positions & their position have not improved
significantly during the last 10 years. Best performers in this index are India and
China as both have significantly improved their standings during the last 10years.
India has moved from 132nd in 2011 to 66th position in 2020 and China has also
moved from 91st to 31st position.
 Inflation Rate: Inflation is the rate of increase in prices over a given period of time.
Inflation is typically a broad measure, such as the overall increase in prices or the
increase in the cost of living in a country. USA inflation rate has been dropped past 10
years i.e. 3% to 1%; Korea inflation rate has also reduced drastically over last decade
which is not good as it is one of alarming sign that the inflation rate is so low it shows
a negative impact on the countries performance to some extent. Japan inflation rate
over a decade is mix only. Few years its negative and some of the years it’s positive
but it’s below 1%. China inflation reduced from 5% to 2% for the first half decade but
later on years its inflation rate is stagnant. India and Sri Lanka has seen many ups and
downs in the inflation rate past 10 years but at the end of the decade the government
by mending their policies has kept the rate optimum whereas France has shown a
complete footfall. If we see on the other side the story of Venezuela the inflation rate
has raised significantly to greater extent i.e., up to 254% in terms of inflation rate it’s
like dead end for any country which happened likewise. As per keeping the optimum
rate over a decade India and Sri Lanka are both good.
 Interest Rate: The interest rate is the amount a lender charges a borrower and is a
percentage of the principal—the amount loaned. The interest rate on a loan is
typically noted on an annual basis known as the annual percentage rate. Lending
Interest Rate is the rate at which loans are being provided. Japan is the best performer
among the other countries in lending interest rate as it provides as low to 1% which
good from customer perspective, in line is USA which has kept its rate constant over a
period of time as its developed economy and not providing unnecessary pressure on
the people living there. Korea has reduced the rate over the time and currently is
giving loans at just 2% to the people which are absolutely affordable. India and Sri
Lanka rate lie between 9% to 11% which is high rate because there are number of
changes in the policies of both these countries and there are also coming the criteria of
developing economy. So, Government is making money through this way also.
Venezuela lending interest rate is so high so that it ranges between 17% to 21% which
states bank loans cost more and people borrow less and saves more on their own. In
this case demand falls in the economy and companies sell less. Japan is the best
performer but Korea is not the good track and has gradually decreased over the last
decade.
 Other factors are:
o Unemployment Rate: The unemployment rate measures the share of workers
in the labor force who do not currently have a job but are actively looking for
work.
o Population: Population refers to the total number of beings living in a
particular area. Population helps us get an estimate of the number of beings
and how to act accordingly. For instance, if we know the particular population
of a city, we can estimate the number of resources it needs.
o Population Growth Rate: The population growth rate expresses the change in
population size as a factor of time. Typically, both for human and non-human
populations, we want to know the average annual growth rate. This gives us
more information than stating the exact population growth for the entire time
period, and allows us to better predict future years of growth or decline for the
population.
 o Analysis of above three points is: USA population growth rate has declined
over the last decade and accordingly unemployment rate has also decreased till
2019 but size of population was constantly rising.
o Japan’s Population has reduced over the years to some extent and population
growth is in negative and is increasing gradually which has a negative impact
which has led to reduction in unemployment rate from 4.5% to 3% over the
decade.
o China has shown a gradual rise in its population level but population growth
rate has been completely opposite to rise in population level as it has shown a
decline which has led to negative impact on economy and shown rise in
unemployment level.
o Korea has shown some amount of rise in population but its not way to much as
of China but growth rate has declined, it has impacted negatively which has
led to rise in unemployment level in the country.
o India has shown a massive growth in the size of population but like other
countries population growth rate has drastically fallen whereas India’s rate
declined by just .40% which is good to some extent in respect to other
countries. Unemployment rate in India is very low as compared to USA. Its
almost half of USA unemployment rate.
o France increases in population size is very minimal but population growth rate
has reduced to some extent due to which there is high rate of unemployment in
the country which has negative impact on economy.
o Venezuela’s population size has reduced to some extent, that is not the thing to
think about but population growth rate of the economy has gone into negative
which has led to increase in unemployment level in the economy.
o Sri Lanka’s size of population has shown a gradual increase over the years and
the population growth rate was also at a increasing rate for about 6 to 7 years
but later on due to some kind of crisis or covid outbreak growth reduced to
some extent. Throughout this phenomenon unemployment rate was constant
between to 4% to 5%; that’s an increasing thing to keep in mind.
o According to me India is good performer on basis of these 3 aspects as
population size increased but growth rate did not drastically decline it was
almost stagnant as well as unemployment rate was constant despite being
mixed economy.

CONCLUSION
From the above analysis it can be seen that there are various factors which need to be
considered while doing the analysis of an economy. By doing the above analysis it is clear
that China is good in GDP, exchange rate and ease of doing business while Japan is good in
Lending interest rates but India has performed exceptionally well on most of the parameters
mentioned above. So to make an investment Indian economy is a very good option and
investor will definitely reap rewards. That’s why more and more companies are coming in
India to start their operations in the country.