Macroeconomic challenges

Macroeconomics is a branch of economics dealing with the performance, structure, behavior and decision making of an economy as a whole, rather than individual markets. This includes national, regional and global economies. Macroeconomics study aggregated indicators such as GDP, unemployment rates and price indices to understand how the whole economy functions. The objective of the present study is to describe the major challenges facing macroeconomics. The present study considers the various challenges facing macroeconomics. The study also describes the various factors which affect the macroeconomics a lot. The study is based on the secondary data. The whole study reveals that there are some major challenges before macroeconomics in India out of which, First challenge is inflation. Rising wages, property prices and food prices have all surged inflation in our country, manifesting a bleaker outlook. Second challenge is Current Account Deficit. India's Current Account Deficit stands at 5.4% of the GDP since it have been a net importer of goods and services. Throughout the past years, exports have been declining and imports are on the rise. The third challenge before it is Fiscal Deficit. The Government's expenditure has been more than its earnings with respect to tax revenues and other such means, resulting in a high fiscal deficit. The fourth challenge is Balance of Payment. India has to bank on external finances, extensively for the huge amount of imported goods and services that it has to cater. The debts have increased two-fold in the last five years as the country's current overall fiscal debt is being reported to be $ 36 for 2012–2013, leading to a slowdown in the capital inflows. Another major challenge is Investment growth. India's gross fixed capital formation has fallen to around 2%, showing no signs of recuperation, since the last four quarters.