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Dr. Farzad Vajihi: Examining Economic Indicators Affecting Financial Markets

Dr. Farzad Vajihi
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Dr. Farzad Vajihi financial expert and economic consultant of the Youth Forum.

Tax revenues, inflation rate, institutional factors and human capital are the most important economic indicators affecting financial markets.

It is with these indicators that the value of trading stocks and banking facilities is determined, and it must be said: sustainable economic development is practically impossible without the growth and development of financial markets.

The most important variable used in macroeconomic analysis and evaluation is the GDP.

This variable tells a lot about the changes in the standard of living in an economy.

Gross Domestic Product is the monetary value of all goods and services produced within the country during a specific period of time.

In fact, what is published as the gross domestic economic index is the sum total of the sums spent in the private and public sector, investment and export, from which the cost of import has been deducted.

Interest rate is also an important tool of monetary policy and is used to control inflation.

Central banks of countries use interest rates if they want to reduce or increase investment or regulate inflation.

Developed countries consider the interest rate as a tool to maintain inflation in a suitable range, for economic health and to reduce the interest rate at the same time as the economic growth.

In another field of economic indicators affecting financial markets, it should be said that in economics, inflation is an increase in the general level of prices, which is often expressed as an irregular and disproportionate increase in prices.

In fact, inflation is a kind of indirect tax on all people to a different extent. In such a way that the highest cost will be on the shoulders of the poor and the lowest cost will be on the shoulders of the rich.

When the monetary demand for the product grows compared to the production, and more money must be paid to buy goods and services, we are actually facing inflation.

If wage growth is the same as productivity growth in the economy, inflation will not occur. The higher the inflation, the lower the purchasing power of a currency.

The government’s budget deficit is another factor in causing inflation.

Because the government will borrow from the central bank or sell foreign exchange earnings to solve this problem.

In this way, liquidity in the economy increases.

Investment is also one of the other important indicators in the sense that an activity takes place in the form of using funds that can create a profitable flow in the future.

In fact, investing is allocating money to something with the expectation of future profits. This has a significant role in the economic growth and development of the country.

In order to make a more accurate policy in this field, the factors affecting private investment should be known.

Economic improvement of countries is one of the important issues at the macroeconomic level. This issue causes economic growth and development of the country.

A strong and efficient economy will gain the trust of consumers and investors. This is considered a strong point in economic power

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