GDP

GDP stands for gross domestic product, the total monetary value of all final goods and services produced within a country's borders in a given period, typically a year or quarter.

There are three primary approaches to measuring GDP: expenditure, production, and income. The expenditure approach sums consumption, investment, government spending, and net exports. The production approach adds value added at each stage of production. The income approach tallies wages, rents, profits, and taxes less subsidies. Real GDP is adjusted for inflation using a price index such as the GDP deflator or chain-linked volumes; nominal GDP is measured at current prices.

GDP is widely used to gauge the size and growth of an economy, to compare countries, and as an input for policy decisions. GDP per capita provides a rough indicator of average living standards. However, GDP omits non-market activities, the informal economy, and distributional aspects; it does not measure well-being or sustainability. Price level differences can distort comparisons across countries, and GDP does not capture environmental damage or social equity.

GDP can be expressed in nominal terms or real terms; real GDP uses a base-year price to remove inflation. International comparisons often use purchasing power parity (PPP) adjusted GDP. Data are produced by national statistical offices and compiled by organizations such as the IMF, World Bank, and OECD, with periodic revisions.