MACRO Essay Example | Topics and Well Written Essays - 1250 words

MACRO - Essay Example It will also considered about the various issues and challenges related to economic growth, unemployment, inflation, and the balance of payment and the exchange rate Economic growth is often defined as the increase in the market value to the quantity of goods and services produced by the economy over the period of time. Economic growth can be measured in terms of the increase in the per capita gross domestic product (GDP) (The Saylor Foundation, 2014). Accordingly, the GDP growth rate of the UK has been identified to demonstrate constant fluctuation. The UK economy is ascertained to face with strong headwinds and challenges. Contextually, the sluggish progress of the global economy along with uncertainty related to euro zone is identified to generate considerable headwinds for the nation’s economy. Output of the economy has remained flat for the last two years demonstrating 3% lower than it was at peak. Besides, private consumption is identified to restrain particularly due to reducing real disposable income, precautionary saving, tight access to credit and deleveraging. Likewise, private investment is also ascertained to be suffering fro m declining demand for goods and services, increased uncertainty and rigid financial conditions. The sluggish growth experienced by the trading partners particularly in Europe has eroded the hopes of quick recovery from the challenges faced by the economy. Declining non-price competitiveness and the limited market share held by the UK in the emerging markets of the world has also hampered the rate of export growth. Notably, high household debt, alongside limited access to mortgages is reckoned to have continuous impact on the residential investment (Wehinger, 2011). According to Office for Budget Responsibility (OBR), GDP growth rate of the economy is expected to be raised by 2.7 % in the year 2014. The OBR has warned about the prediction