Indicators

Of
Economic Prospects

Presented By :Simi Joy E.N. - 22

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Economic Indicators
Developed to forecast the turning points of the business cycle. Based on Timing : Leading indicators designed to predict economic recessions. Coincident Indicators designed to move concurrently with the business cycle. Lagging indicators designed to follow behind the cycle.

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History of Economic Indicators

Developed at National Bureau of research in the 1930s. Published by the US Bureau of Economic Analysis in BCD (Binary Coded Decimal) 1961. Published by the Conference Board since 1995 (tcbindicators.org).

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Coincident Indicators
Used by the Business Cycle dating Committee to identify peaks and troughs. Employment Production Personal income Manufacturing sales Trade (wholesale and retail) sales

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Leading Indicators
Average weekly hours. New orders. Consumer expectations. Building Permits. Stock Prices. Interest Rate Spread.

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Lagging Indicators
Inventory-sales ratio. Change in unit labor costs. Average prime interest rate. Commercial and industrial loans outstanding. Consumer credit to income ratio. Price of consumer services. Average duration of unemployment.

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By Directions
Procyclic Indicators. Countercyclic Indicators.

Acyclic Indicators.

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Modern Approach
Economy is subject to ups and downs but there is no regular cycle Economy is subject to shocks negative or positive. Examples of negative shocks are: Stock market crash in 2000 9-11 Collapse of Housing Bubble 2006 Credit Crunch 2007

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Indian Economy - Growth Trajectory

12.0
10.0

8.0

Per cent

6.0

4.0

2.0

0.0

Average GDP growth at 8.9 per cent during 2003-08 Real GDP grew at 8.8 per cent in 2010-11 (Q1) (6.0 per cent in 2009-10 (Q1)) RBI places real GDP growth forecast at 8.5 per cent for 2010-11 Free Powerpoint Templates Page 9

India's SWOT Analysis

STRENGTHS
High savings/investment.

Quality talent and IT.

Broad based and growing entrepreneurial class.

Market size.
Language.

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WEAKNESSES
Physical infrastructure.
Agriculture.

Shortage of skilled manpower.

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OPPORTUNITIES
Knowledge based growth. Increased integration with world economy. Urbanization.

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THREATS
Global Uncertainty.
Climate change energy and food security.

Regional and social inequalities.

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