Deficit Financing - Comparison among India, USA, China, Brazil & Italy with reference to its impact on their respective economies.

2. Comparison among
India, USA, China, Brazil & Italy with
reference to its impact on their
respective economies.

3. Definition
Revenue Expenditure

4. How it occurs:
Political
factor
Social
schemes
Uncontrolled
plans
Poor
governance

5. Impact on Economy
Slow
economic
growth
GDP
Inflation
Current
account
deficit
Exports
/
Imports

6. Deficit recovering
Minting
money
Borrowing
Selling
Govt-
bonds
Selling
assets

7. Budget 102 trillion dollars in
2011
119.8-238 Trillion dollars in
2012(estimation)
Renminbi.
Yuan.

8. CHINA
0
1
2
3
4
5
6
7
8
2010
2011
2012
0
1
2
3
4
5
6
7
8
2010
2011
2012
Figures in billio
Revenue Expenditure

9. CHINA GDP-2012
The Gross Domestic Product (GDP) in China was
worth 7298.10 billion US dollars in 2011, according
to a report published by the World Bank. The GDP
value of China is roughly equivalent to 11.77 percent
of the world economy.

10. CHINA Inflation rate-2012
The inflation rate in China was recorded at 2 percent
in August of 2012. Historically, from 1994 until
2012, China Inflation Rate averaged 4.27 Percent
reaching an all time high of 27.70 Percent in October
of 1994 and a record low of -2.20 Percent in March
of 1999.

11. CHINA Exports-2012
China exports were worth 177.97 Billion USD in
August of 2012. Historically, from 1990 until
2012, China Exports averaged 49.76 Billion USD
reaching an all time high of 181.10 Billion USD in
May of 2012 and a record low of 2.84 Billion USD in
January of 1990.

12. CHINA Unemployment-2012
The urban unemployment rate in China was last
reported at 4.1 percent in the second quarter of
2012. Historically, from 2002 until 2012, China
Unemployment Rate averaged 4.15 Percent reaching
an all time high of 4.30 Percent in December of 2003
and a record low of 3.90 Percent in September of
2002.

13. CHINA-Economic Strategy

15. INDIADeficit Financing -2012
India's fiscal deficit during the 2011-12 fiscal year
that ended in March was Rs 5,20,000 crore, or equivalent
to 5.9% of India's gross domestic product (GDP).
Net tax receipts were Rs 6,42,000 crore and total
expenditure was Rs 13,19,000 crore during the fiscal year.

16. INDIAGDP -2012
The Gross Domestic Product (GDP) in India was worth
1847.98 billion US dollars in 2011, according to a report
published by the World Bank.
The GDP value of India is roughly equivalent to 2.98
percent of the world economy.

17. INDIA Inflation Rate-2012
The inflation rate in India was recorded at 6.87 percent
in July of 2012.
From 1969 until 2012, India Inflation Rate averaged
8.02 Percent

18. INDIA Exports-2012
India exports were worth 22443 Million USD in July of
2012.
From 1994 until 2012, India Exports averaged 8464.26
Million USD

19. INDIA Unemployment-2012
The unemployment rate in India was last reported at 3.8
percent in 2010/11 fiscal year.
From 1983 until 2011, India Unemployment Rate
averaged 7.57 Percent.

20. WORRIES
India's public debt stood at 68.05% of GDP which is
highest among the emerging economies.
Inflation remains stubbornly high with 6.87% in July
2012, the highest among its BRICS
(Brazil, Russia, India, China and South
Africa) counterparts
Growth significantly slowed to 6.8% in 2008–09, but
subsequently recovered to 7.4% in 2009–10, while
the fiscal deficit rose from 5.9% to a high 6.5% during
the same period.

21. Effect on Economy
Poor infrastructure Development
Lack of money supply in the economy
Low standard of living
Unemployment
Poverty
Instability in the economy

22. How INDIA can overcome
The government should take steps to reduce
expenditures to check slippage in government finances.
As per the survey, the provisional estimates of Centre's
Resources indicate that the fiscal deficit will be
4.1 per cent in (2012-13),
3.5 per cent in (2013-14),
3 per cent in (2014-15, 2015-16 and 2016-17)

24. USA Deficit Financing-2012
Budget is deficit upon by $1 Trillion for the forth time in a row.
The gross federal debt increases each year by
substantially more than the amount of the deficit each
year. That is because a substantial amount of federal
borrowing is not counted in the budget.

25. US Federal Deficit:

26. US Federal Debt:

27. Effect on GDP:
The CBO(Congressional Budget Office) predicting that
increasing in this fiscal deficit would shrink GDP by 2.9% for
the first half of next year, which would lead to a “significant
recession” and a loss of two million jobs.
Debt to GDP ratio in one of the indicator of the health
of an economy.
i.e., Debt/GDP = 16%/15% = 106%.
It shows the bad health of economy.

28. How US can overcome:
• Treasury must sell treasury bonds to raise the money to
cover the deficit. It is also known as “public dept”, since these
bonds are sold to public.
• Taxes will be raised.
• benefits will be lowered.

29. Effect on Economy:
It affects the economy very badly.
>higher interest rate.
>value of the dollar falls.
>repayment will be in cheaper dollar rate.
>higher interest ratio will again affect the
budget as about 5% of the budget is
allocated to debt interest payments.

31. ITALY Deficit-2012
Italy reported a Government Budget deficit equal to
-3.90 percent of the country„s GDP.

32. ITALY GDP-2012
The Gross Domestic Product (GDP) of Italy is
2194.75 billion dollars.
.

33. ITALY Inflation Rate-2012
The inflation rate in Italy was recorded at 3.20 percent
in August of 2012.
.

34. ITALY Exports-2012
Italy exports were worth 34.4 Billion EUR.

35. ITALY Unemployment-2012
The unemployment rate in Italy was last reported at
10.7 percent in July of 2012.
.

37. BRAZILGDP-2012
The Gross Domestic Product (GDP) in Brazil was
worth 2476.65 billion US dollars in 2011.
The GDP value of Brazil is roughly equivalent to 3.99
percent of the world economy.

38. BRAZIL Inflation rate-2012
The inflation rate in Brazil was recorded at 5.24
percent in August of 2012. Historically, from 1980
until 2012, Brazil Inflation Rate averaged 417.11
Percent reaching an all time high of 6821.31 Percent
in April of 1990 and a record low of 1.65 Percent in
December of 1998.

39. BRAZIL Exports-2012
Brazil exports were worth 22.4 Billion USD in August
of 2012. Historically, from 1997 until 2012, Brazil
Exports averaged 10219.59 Million USD reaching an
all time high of 26158.00 Million USD in August of
2011 and a record low of 2949.15 Million USD in
January of 1999.

40. BRAZIL Unemployment-2012
The unemployment rate in Brazil was last reported
at 6.5 percent in July of 2012. Historically, from
2001 until 2012, Brazil Unemployment Rate
averaged 9.22 Percent reaching an all time high of
13.10 Percent in August of 2003 and a record low of
4.70 Percent in December of 2011.

41. Country Deficit
Rate
GDP Inflation
Rate
Exports Unemployment
CHINA -1.10% 2.30% 2% 177.97
Million
USD
4.1%
INDIA -4.60% 5.50% 6.87% 22443
Million
USD
3.8%
USA -8.70% 2.30% 1.70% 183
Billion
USD
8.10%
ITALY -3.90% 2.60% 3.20% 36.8
Billion
EUR
10.70%
BRAZIL 2.60% .50% 5.24% 22.4
Billion
5.30%

42. Reference:
1. http://www.tradingeconomics.com
2. http://www.usgovernmentspending.com
3. http://www.creativeintelligence.com
4. http://www.economicsmjjsvr.com