GDP
Also called: gross domestic product, real GDP, nominal GDP, GDP growth
The total value of the final goods and services produced in a country over a period. Its growth rate is the most common measure of how fast an economy is expanding.
GDP can be measured from spending, production or incomes. Nominal GDP uses current prices; real GDP removes inflation. Figures are estimates, released early and revised later. Stock market returns depend on listed companies' profits per share and valuations, so they can diverge from GDP growth.
Example
Nominal growth of 11% with economy-wide prices up 5% gives real growth of (1.11 ÷ 1.05) − 1, about 5.7%.
Learn more in these lessons
- GDP and economic growthWhat does GDP measure, and does fast growth mean good stock returns?
- Employment and consumptionHow do jobs and household spending drive the economy, and how are they measured?
- Fiscal policy and government borrowingHow do government taxes, spending and borrowing affect the economy and markets?
Related terms
Spotted a mistake or something unclear? Report it by email. Here is how corrections work.