ECONOMIC INDICATOR

AN ECONOMIC INDICATOR IS A STATISTIC ABOUT ANY ECONOMIC ACTIVITY .IT ALLOWS ANALYSIS OF ECONOMIC PERFORMANCE AND PREDICTION OF ECONOMIC PERFORMANCE.

ECONOMIC INDICATORS

GROSS DOMESTIC PRODUCT(GDP)

GROSS NATIONAL PRODUCT(GNP)

INFLATION RATE

GDP:

The total market value of all goods and services produced within the nation’s geographic border over a specific time period.

GDP = Consumption + Government Expenditures + Investments + Exports – Imports

e.g., if an American firm produces its product in Pakistan then its market value will be count in our GDP.

PAKISTAN GDP GROWTH RATE

The Gross Domestic Product (GDP) in Pakistan expanded 4.14 percent in 2013/14 fiscal year. GDP Growth Rate in Pakistan averaged 4.92 percent from 1952 until 2014, reaching an all time high of 10.22 percent in 1954 and a record low of -1.80 percent in 1952.

GNP

A market value of what a country’s citizens produce in given year, whether or not the production occurred in that country.  

GNP = Consumption + Goods + Investment + net export +Net factor payment.

e.g., An American company produces its product in Pakistan then it will be include in American’s GNP.

Current situation

Gross National Product in Pakistan increased to 11175600 PKR Million in 2013 from 10565132 PKR Million in 2012. Gross National Product in Pakistan averaged 7643303.86 PKR Million from 2000 until 2013, reaching an all time high of 11175600 PKR Million in 2013 and a record low of 3778155 PKR Million in 2000.

INFLATION RATE

Inflation can mean either an increase in the money supply or an increase in price levels.

The percentage rate of change of the price index over time

A measure of how fast a currency loses its value. The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

CURRENT SITUATION

The inflation rate in Pakistan was recorded at 2.11 percent in April of 2015. Inflation Rate in Pakistan averaged 7.99 percent from 1957 until 2015, reaching an all time high of 37.81 percent in December of 1973 and a record low of -10.32 percent in February of 1959.

Comparison

Honda manufactures cars in the U.S., but is  incorporated in Japan. The cars it produces in the U.S. are added to U.S. GDP, but not U.S. GNP, as these cars use domestic factors of production (labor and resources), but are produced by a foreign nation. Conversely, the values are added to Japan's GNP, but not Japan's GDP. 

AFFECT ON EACH OTHER

too much GDP growth is also dangerous, as it will most likely come with an increase in inflation