The structures through which resources are distributed and used form the economy of any given country. The economy is the backbone of a country's thus it determines its survival. Any minor change to any aspect of an economy can have positive or negative consequences for the respective nation state of which is felt at its every inch. As such, a country's economy is what forms the several conditions that determine the survival of any organization. A poorly performing economy is catastrophic to a firm's survival and vice versa. The values, laws, history among other aspects administer the economy of any country and enable it to evolve due to necessity.
The short-term economic outlook of the USA is promising, and it is evident from the key economic indicators. The GDP which is the most critical indicator of the economy's performance is expected to reach about 3% which is much better than the 1.9% and 2.1% for 2016 and 2015 respectively(Amadeo, 2017). The current president, Donald Trump has also vowed to increase the economic growth by about 4%. According to the Federal Reserve Chair, Janet Yellen, the unemployment rates are also expected to drop to less than 4.5% which will be the lowest prices since May 2007(Amadeo, 2017). It is much better than what the Fed had anticipated, a 6.7% target (Amadeo, 2017). Despite the inflation rate standing at 1.9% and being expected to reach about 2% in, 2018, the country's economy is still going to perform well(Amadeo, 2017). This inflation rate is much higher as compared to 1.5 and 0.7% for 2016 and 2015 respectively (Amadeo, 2017). On the other hand, the primary cause for this is due to the increasing gasoline prices. From these economic indicators, it means that the USA economy is expected to perform better in the short term.
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USA GDP Chart
According to the Federal Reserve's estimates, the GDP is projected to grow by 2-3% by 2018(Amadeo, 2017).However, during the recession that had affected the country, a lot of people dropped out of work, and they have not yet returned. The USA president has also promised a 4% economic growth in the next five years of his term. However, this will bring about a catastrophic boom and bust cycle. As such, the country will face by another recession. In 2015, the dollar had risen by about 25% in the foreign market exchange (Amadeo, 2017). Nevertheless, this is expected to decline in the next five years as the Federal Reserve starts raising its interest rates. As result of a weakening dollar, the import prices are bound to increase thus inflation will set in the country. It is because a weaker dollar means another foreign currency is stable. By 2017, the USA debt had reached about $20 trillion forcing the Federal budget to see a 10% cut (Amadeo, 2017). The USA President Donald Trump promised to reduce the debt, but it is expected to rise by another $5.3 trillion as a result of his economic policies (Amadeo, 2017).
The short term global economic growth is expected to grow as the momentum that was in Q4 of 2016 was carried forward to Q1 of 2017. The Global GDP is expected to rise by about 2.8% in a year’s time (Focus Economics, 2017). The major booster for this economic growth is the developed countries that are also experiencing some economic growth. The USA is seeing a decline in unemployment rates and the accommodative monetary policies are propelling the USA economy. The Chinese market is also facing a surprise growth unlike what had earlier been predicted by economist that it would see a recession. Most of the Latin American countries are recovering from recession which is expected to be better by 2018(Focus Economics, 2017).
The long-term economic growth of the globe is going to be affected by various uncertainties. On March 29th, Article 50 was raised which brought about the much awaited Brexit course which is bound to send the UK and the EU into unchartered waters (Focus Economics, 2017). The Scottish government is also planning to hold a referendum before 2019 to determine whether it will remain in EU (Focus Economics, 2017). These anti-EU parties are going to affect the stability of EU thus bringing about an effect to the global economy. There is uncertainty revolving around Trump's commercial policies which mighty also influence the global trade. The USA is one of the largest economies in the world thus any economic policy they set will affect the globe (Focus Economics, 2017). With the Chinese government implementing policies on reducing global emission, they are bound to influence the economic development of the country which might also drag the world economic growth.
For the year 2017 during its second quarter financial results, the company saw an 8% increase in its revenue and got $445.2 million. According to the CEO, David O' Connor, the income was viewed as a result of its entertainment and sports business. The MSG revenues from entertainment for the fiscal year were $192.5 million, a 6% increase from 2016(The Madison Square Garden Company, 2017).Its sports revenue was up by 10% to $252.7 million (The Madison Square Garden Company, 2017). It was major because of the higher professional sports teams and league distributions’ ticket-related revenue. Following the expected growth in the USA and the globe, the long term, revenues for Madison Square Garden expected to increase. It is because; an improvement in the economy will mean that there are a lot of job opportunities (Kenen, 2000).
Global economic development will be good for the USA for it will boost its international operations regarding exports thus country getting revenue used in the expansion of the economy. The USA citizens will have access to disposable income which will increase their spending levels not only for essential items but also leisure. The Madison Square Garden being a leader in providing recreational activities, it will reap well. Nevertheless, the long-run economic performance of the USA and the global economy is going to be marred by various challenges. As such, the USA will face a reduction in job opportunities as it enters a recession. A poorly performing economy will also mean that people who have loans will be affected by the high-interest rates (Kenen, 2000). As such most people will focus on savings and repaying their loans thus, they will only buy the essential items needed for survival. A few people will engage in leisure activities thus the Madison Square Garden will be affected. It is because the services it offers are found in this category. Thus it will see a decline in its finances.
The economy of any country plays a significant role in ensuring that organizations' attaining their goals and objectives. In case the economy is performing poorly, most businesses are affected regarding achieving their profitability margins. However, an economy that is performing well will allow companies to reap a lot of revenue from their markets. The global economy also affects the economy of a country even though it might be performing well. As such, it is paramount for countries and the globe to ensure that they have in place proper economic policies to boost businesses.
References
Amadeo, K. (2017). Experts Forecast Steady Growth . Retrieved on 12 April 2017, from https://www.thebalance.com/us-economic-outlook-3305669.
Amadeo, K. (2017, March 23). Top 9 Economic Predictions for the Next 10 Years . Retrieved on 12 April 2017, from https://www.thebalance.com/top-economic-predictions-for-the-next-10-years-3305699.
Focus Economics. (2017, March 29.). Major Economies Economic Outlook | Data, Statistics & Forecasts. Retrieved on 12 April 2017, from https://www.focuseconomics.com/regions/major-economies.
Kenen, P. B. (2000). The international economy . Cambridge: Cambridge University Press.
“The Madison Square Garden Company.” (2017). Retrieved on 12 April 2017, from http://www.themadisonsquaregardencompany.com/news/2017/2nd-Quarter-results.html.
