Let’s assume you have a company and would want to invest in my country, Indonesia. As a potential investor using a top-down approach analysis, you would want to know first the economic condition of the country. GDP is the “big picture” measurement of a country’s economic condition. It also represents the view on potential sectors to be invested.

I. GDP Growth

Instead of total GDP amount, GDP growth could better represent the economic outlook of a country, whether it is good or not. Normally, it would be preferable if the growth is on an increasing trend.

II. Sectors Contribution to GDP

This is a measure on how much percentage does a sector contribute in total GDP. It lets you know what is the major economic driver of the country. You could use the prospect of major contributors to estimate the direction of the country’s economy.

III. GDP Growth per Sector

Finally you could narrow down your analysis on what sector provides the best growth potential. Large contributors does not guarantee more growth than smaller ones. In terms of business perspective, especially as foreign investor, you could consider growth per sector to determine the most potential sector to invest.

IV. Combining the Analysis from GDP

Although growth per sector would be the best indicator for potential growth, sector contribution percentage would need to be considered too. More contribution usually means more government supports, as these big contributors will be the main economic driver for the country. To conclude, your foreign investment analysis should consider the balance between growth potential and the size of government supports for a particular sector.