With its headquarters in Washington, D.C., International Monetary Fund (IMF) is an international organization that keeps a check on the financial system of this planet by following apolicies designed specifically for its member countries. It was formed with the goal of stabilizing international exchange rates and bringing in development by utilizing its sharply designed policies.
45 countries were involved in laying down the corner store for IMF but as of now the strength of IMF has quadrupled due to the political independence achieved by plenty of countries since 1944. Since then, IMF has worked pretty hard to adapt with changing conditions so that it could continue to server its purpose without the disregard of any member. The data dissemination system organized by IMF was one such drastic step where IMF guided countries to desseminate their financial and economic data to its public. As of May 2010 Ukraine happens to be the largest borrower of funds with around $16.4 billion grant permitted by IMF.
IMF has faced harsh criticism for plenty of its policies like currency devaluation suggested to poor countries which is defined by experts as economic prosperity. The economic crises of Argentina in 2001 was considered to be the result of IMF policies that were being followed by Argentina. Before the involvement of IMF Kenya was enjoying its growth but with the entry of IMF and its policies Kenya saw some of the countries frauds occurring and all this was related to IMF. Documentaries like Life and Debt have explored the disastrous results that countries have faced once IMF entered their kingdom thus adding salt to injuries.
Keeping aside all the allegations and disputes IMF has continuously been working hard to help those who need help. As of now it is being run under its Managing Director (which is from western countries most of the time) Dominique Strauss-Kahn who happens to be from France.
HFCE or Household final consumption expenditure is a measurement of a countries accounts based on consumer spending. It is based on the amount that individuals or households spend each quarter, or each year, on every type of goods and services.
It does not just look at regular households of two adults and two children; it also looks at other types of living such as single people, or those living in communal groups such as retirement homes.
It does not just concentrate on major commodities but includes everything that is purchased. HFCE looks at items such as the cost of renting or mortgage payments on homes.
HFCE is basically a measurement of the actual average price paid by purchasers for a huge variety of goods and services, it includes all taxes that have been added to the costs and even takes into account other more invisible expenditure such as the amount spent tipping at restaurants.
It takes into account everyday purchases such as food and clothing. Also included are semi-regular payments such as tickets for entertainment events, there are also very occasional payments made to the government such as the fee for issuing passports.
The list is endless but when calculated together it gives an indication of the average expenditure of individuals and households.
Economic indicators are basically the most recent set of statistics that relate to be economy. This would include areas such as the current GDP, or perhaps the rate of unemployment, and other considerations such as the rate of inflation.
All of these indicate how well the economy of the country is performing. All of these statistics combine with other less specific information such as a threat of war, a huge oil leak, industrial unrest, and many other factors in indicating how well an economy of a country will do in the short or longer term.
Governments and stock markets, many different industries and individual companies, as well as a whole host of organisations analyse all of this information to decide, for example, what a companies value may be on the stock market, and whether to by or sell its shares based on this information.
If for example there is a threat of war shares in tourism businesses may fall, conversely the country that is under threat of war may be a major producer of a commodity, as such, investors may decide that there will be a shortage of this commodity and its price may increase dramatically on the open market.
High unemployment may indicate that on average people will have less money in their pocket to spend and this will decrease the amount of goods that manufacturers can sell, it may also indicate that companies are not performing well as they are either shedding staff or failing to take on new staff, which would suggest the power worried about their financial futures.
