DARE - Because Entrepreneurs Do

The United Nations released a report on December 2, 2011 which paints a rather grim picture of the world economy.

Why should we bother? Well, as entrepreneurs it is better to know what we would encounter. So Dare helps you get to the key data points quickly.

 

Fiscal Deficit as a per cent of GDP

The fiscal deficit is central here.  United States slipped to a record fiscal deficit in the last decade ending in a debt crisis this year. It had a budget surplus in 2000. Europe under the Euro-zone never found its foot stronger.

Take the instance of India which had a target deficit of 3.5 per cent of GDP and is now likely to touch 5.6 per cent by the fiscal year end. Hence, the UN estimate below for China and India may move upwards.

 

 

 

 

 

 

 

Government Spending as a per cent of GDP

Usually a higher fiscal deficit indicates that the government is borrowing money from multilateral agencies and the public to spend on areas where it feels a stimulus is required. However, in the present case the deficit is growing not because of government spending alone. It is also growing faster because of higher interest rates.  The most visible example of this is the Europe where government spending is zero while its deficit is quite high.

 

 

 

 

 

 

 

 

Government to debt as a per cent of GDP

Government borrows money to spend on wartime expenditure, welfare and other crucial sectors requiring economic c stimulus. Presently, US and Europe have very high debt levels. Servicing this debt is adding to the fiscal deficit. At the same time government spending is expcted to remain flat.

 

 

 

 

 

 

 

 

Closer look at US and Europe's  Four Macro-Economic Indicators

 

The United States

 

 

 

 

 

 

Europe

 

 

 

 

 

 

Data Source: UN World Report, 2011 (Pre-Release)

 

 

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