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Import ratio

Import Ratio

The import ratio refers to the proportion of a country’s total imports compared to its Gross Domestic Product (GDP) or total trade volume. It is used to gauge a country’s reliance on foreign goods and services. A higher import ratio suggests greater dependence on international markets for goods and services, while a lower ratio may indicate a more self-sufficient economy. Monitoring the import ratio helps in understanding trade imbalances and economic vulnerabilities.

Example

If a country imports $500 billion worth of goods and services while its GDP is $2 trillion, the import ratio would be 25%.

Key points

• Measures the proportion of imports relative to GDP or total trade.

• Higher ratios indicate greater reliance on international markets.

• Used to analyze trade imbalances and economic dependence.

Quick Answers to Curious Questions

What does a high import ratio indicate about an economy?

A high import ratio indicates that the economy relies heavily on foreign goods and services, which can be a sign of trade imbalance or dependency.

How is the import ratio calculated?

It is calculated by dividing total imports by GDP or total trade volume, then expressing the result as a percentage.

Why is the import ratio important for economic analysis?

It helps policymakers and economists understand a country’s trade dependency and identify areas where domestic production might be increased.

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