Introduction

The economical factors in contemporary world play quite a significant role in characterization of the countries. This report would represent an economical overview of the two countries, examining the current state of their economical development. “Economic growth is the increase in value of the goods and services produced by an economy. It is conventionally measured as the percent rate of increase in real gross domestic product, or GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, “economic growth” or “economic growth theory” typically refers to growth of potential output, i.e., production at “full employment,” which is caused by growth in aggregate demand or observed output. As economic growth is measured as the annual percent change of National Income it has all the advantages and drawbacks of that level variable. But people tend to attach a particular value to the annual percentage change, perhaps since it tells them what happens to their pay check” (Trading Economics, 2010). This review would be based on the several main paragraphs, which became the main chapters of the analysis. These core characterizing factors are: GDP growth, inflation and unemployment rate. It goes without saying that in economical analysis these three factors play quite significant role. The two countries this report would compare are India and Spain they are located on one continent but in different part of the world: India is located in Asia and Spain in Europe. This factor also has an impact on their economical development. It also should be noted that India is considered to be one of the most quickly developing countries and Spain, which is the member of European Union has significant developmental problems.

Chapter One: Comparison of GDP of India and Spain.

Description of Indian GDP

Speaking about the Gross Domestic Product in economic characterization of the country plays one of the core roles, as it actually reflects the growth of manufacturing powers in the country (if we speak about real growth rate) but the increase of price. India is considered to be one of the most quickly developing countries and for the recent quarter the growth of GDP in India was 8.8 percent according to the last reported quarter: “GDP in India expanded at an annual rate of 8.80 percent in the last reported quarter. From 2004 until 2010, India’s average quarterly GDP Growth was 8.37 percent reaching an historical high of 10.10 percent in September of 2006 and a record low of 5.50 percent in December of 2004” (Trading Economics, 2010). It should be noted that the diversity of Indian economy unites wide variety of industries. Among them we should mention: contemporary agriculture, village farming, which is traditional for India, different handicrafts and wide variety of modern industries and services, which could be really called one of the major sources of the Indian economic development and growth: “Accounting for more than half of India’s output with less than one third of its labor force. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points” (Trading Economics, 2010). The following chart would be a perfect illustration of Indian GDP growth.

It should be noted that analysts consider that the boost of Indian economy is closely connected with the development of the three sectors, which added to the growth of Indian economy: “Agricultural output along with strong development in the Industrial and Mining sector has helped to boost the Indian economy. Agricultural output rose 2.8 per cent y-o-y thanks to improved harvests. Industrial production increased by 12% and in the mining sector by 9%” (Trading Economics, 2010). Analyzing the graph we could see that the GDP rate, characterizing the development of Indian economics was actually rapidly falling with less or more success. But the year 2010 has become really shifting in economical development, agricultural sphere, which is not the strongest part in Indian economics rose significantly due to the harvest improvement and industrial and mining production has always been the strongest parts in Indian economy.