Gross domestic product definition
Gross domestic product
Gross domestic product (GDP) is a measure of the market value of all the final services and goods produced in a specific period by a country or economic area.
It’s a measurement of an economy’s size and health over a period, usually one quarter or one year. GDP is used to compare different economies’ sizes at various points in time.
What does gross domestic product mean?
GDP gets calculated in three ways: production, expenditure and income. Production includes factors such as domestic manufacturing, expenditure includes all government expenditure, and incomes includes personal and corporate income.
It’s then adjusted for inflation and population to provide deeper insights. GDP is a crucial tool for policymakers, businesses, investors, and analysts in strategic decision making.
The standardized calculation of a country's GDP includes private and public consumption, government expenditure, private inventories, construction costs, investments, and the foreign balance of trade; exports get added to the value and imports are subtracted.