Inflation represents the rate at which the general price level in an economy rises. If you run a business in a high-inflation country, the prices you pay for your inputs will rise and the value of any cash savings you have or money you`ve lent to others will erode. This is a decisive moment: the company you founded, advised or where you are an important employee has gained a foothold in the domestic market and wants to expand internationally. There are several factors that your organization should consider: A country`s unemployment rate is the number of people who are not working, divided by the number of people who are working or actively looking for work. A high unemployment rate can indicate that a country`s economy is struggling, and you can take a break if you plan to invest. Here`s a look at three key economic indicators and what they tell us about the business climate in a given country. These are just a few of the indicators you might consider if you decide to expand your business globally. With a solid understanding of economics and the intricacies of international markets, you can help your business expand its reach and succeed. When evaluating the potential markets you want to enter, consider what the country`s unemployment rate could mean for your business. This is usually a good sign for businesses when GDP grows, but there are nuances in the number: if a country`s GDP doesn`t grow as fast as its population, GDP per capita doesn`t grow.

This means that people`s standard of living and purchasing power do not increase. An understanding of key macroeconomic indicators provides a broader context that, combined with company-level analysis, can not only give you more confidence in the decision to expand internationally, but also get an idea of the potential pros and cons of this approach. Despite these drawbacks, rising inflation can be good if you`ve borrowed money at a fixed interest rate to build or grow your business. Prosperous economies often have some inflation. As long as it`s stable and predictable, you can plan for it in your budgeting and pricing decisions. However, a zero unemployment rate is not necessarily ideal for businesses. Given the way unemployment is calculated, those who change jobs to get better opportunities in a thriving economy are considered unemployed every time they move between jobs. With low unemployment, companies have to spend more to attract candidates to work at their companies, and these costs are often passed on to consumers in the form of higher prices, leading to inflation. Do you want to turn the uncertainty of today`s economy into an opportunity for your business? Check out our four-week online course on global trade and learn more about how to assess the impact of macroeconomic, political and social indicators on business decisions.

This article was last updated on December 18, 2020. It was originally released on July 30, 2019. Gross domestic product (GDP) is the value of goods and services produced in an economy. The lunch you bought at the local restaurant, the money your government pays to firefighters and teachers, the funds a company spends to build its new headquarters, the value of a vehicle made in your country and sold abroad – it`s all part of GDP. Before taking the plunge, how do you know which foreign market to enter? What factors can give you insight into the opportunities and risks you may face in the country of your choice? Economic indicators – data used to measure an economy`s performance and future direction – can provide you with valuable insights as you evaluate your international expansion options. Related: 5 Common International Business Challenges You Should Consider. .