Busines economics Essay Example | Topics and Well Written Essays - 1500 words

Busines economics - Essay Example Primarily among these tool is the GDP. It refers to the net market value of the goods and services provided by a country. It can also be used to assess the standard of living of citizens in that country and can be used to gauge the demand and the buying capacity of individuals during that financial year. The Gross Domestic Product (GDP) of the UK shrunk 0.60% during the latter half of the financial year in 2010. It has been calculated that United Kingdom’s average quarterly growth rate was 0.59% which climbed the charts steadily to 5.30% and also witnessed a record low of -2.5%. (United Kingdom GDP Growth Rate, 2011) The UK as a robust economy has its GDP usually boosted by the strong performance of the banking and insurance services. The manufacturing industry meanwhile faced a recession and the key to overcoming this problem lies in more government involvement while at the same time continuing its social welfare initiatives. One of the most current statistics that have been obtained indicated the following Country Interest Rate Growth Rate Inflation Rate Jobless rate Government Budget Exchange Rate UK 0.50% -0.60% 4.00% 8.00% -11.40% 1.62 (United Kingdom GDP Growth Rate, 2011) However when compared to 2009 there has however been a slight improvement of 1.5% GDP in the last quarter of 2010. The manufacturing experienced a slight boost in the latter half of 2010 climbing by 1.1% and the utility production also grew by 4.6%. The mining sector experienced a slight meltdown falling by 4.5%. The construction industry was also severely hit as several major construction projects were put on hold due the banking crisis that arose in 2009-2010. It fell by 2.5 %. Other sectors that experienced a drop were the business services and the transport sector at 1.1% and 1.4% respectively. (United Kingdom GDP Growth Rate, 2011) The German economy on the other hand fared better compared to its counterpart. The GDP increased by 0.40% in the latter half of 2010 compared to 2009. It also had its share of ups and downs with its average GDP growth at 0.29%. This reached a peak of 2.30% in June 2010 and a nadir of 3.50% in March 2009. (Germany GDP Growth Rate, 2011) Export forms the backbone of German economy and accounts for almost one third of its income. Germany has performed better than UK during this taxing period as shown by the market indicators and its strong commitment in engaging to closer European cooperation between member countries in both economic and commercial policies is reaping benefits. Country Interest Rate Growth Rate Inflation Rate Jobless rate Government Budget Exchange Rate UK 1.00% 0.40% 2.00% 7.40% -3.00% 1.42 (Germany GDP Growth Rate, 2011) Comparing both the Macroeconomic performance of UK with its European counterparts over the past ten years, one finds that its performance of attaining an annual GDP growth of 2.3% places it third behind US and Canada. However rising levels of both private sector debt and public sector debt ha ve held back the government in providing sufficient fiscal stimulus to the manufacturing and industrial sector. Trade, an area where Germany has made rapid progress also has declined in the context of the UK market. (BIS Economic Paper No.9, 2010) Business investment has also taken a backseat in UK. Post 2000, survey estimates indicate that UK is ranked behind