All That You Need To Know About Global Economic Indicators
Indices and World Economic Indicators react to foreshadow the health of the global economy.
World economic indicators are particular measures and indices that points not only to the complete health of the global economy but also offers an insight into its future. There are different kinds of economic indicators.
Some experts use economical statistics that presents the ups and downs of specific trends in economic activities. Some of the most commonly used world economic indicators include the unemployment rate, populations living below the poverty line, GDP per capita, the actual GDP growth, GDP – Purchasing Power Parity, amounts of foreign direct investment, rates of inflation and the current account balances.
World Economic Indicators: A Summary
To understand the utility of all the economic indicators, it is crucial to first know how they are associated to the economic activities of the world.
Experts call an indicator a pro – cyclic if it moves in the direction of the economic cycle or economic movement of a country. It means that the motility of economic indicators is proportional to the economic performance trend. When economies show an increasing trend , the value of pro – cyclic indicators increases too. Gross Domestic Product, commonly called GDP, is a perfect example of this kind of economic indicator.
Counter-cyclic economic indicators are associated to the economic performance. The unemployment rate is a perfect example of counter cyclic indicator. On the slowing down of the economy, there is an increase I unemployment rate.
Apart from these two economic indicators, another world economic indicator is commonly called acyclic economic indicator. But, this kind of economic indicator is not directly associated to the economic health of the country. Due to this reason, acyclic indicators are not considered as a god method to measure an economy's health.
Accessibility of Economic Statistics:
Statistics such as unemployment rates, stock market values, GDP figures, current account balances are those economic indicators that are used on quarterly, monthly or even on an immediate basis. GDP figures are made available on quarterly basis whereas unemployment rates are released every month. In the case of Dow Jones Index figures, these figures are made available instantly.
The value and the quality of the economic indicators, thus depends upon the accuracy with which they foretell the future changes in economic activities. The best economic indicators that foretells the changes that will take place in the near future. These economic indicators are highly essential for investors as their their investment decisions depend on the economic fluctuations of the country.
On the other hand, lagging global economic indicators responds to the change of the economy few quarters later. One such example is unemployment rate.
Unlike the lagging and leading economic indicators, a third category of economic indicators include coincident economic indicators.