In economics, GDP is a measure of the total value of a country’s production. It includes all output produced by its residents, plus the value of imported goods and services, minus the import cost of raw materials and semi-finished products. It excludes depreciation of fabricated assets and the depletion or degradation of natural resources. It is measured in current dollars.
As an aggregate measure, Global GDP provides a convenient way of comparing the economic performance of countries and regions. It also serves as an important indicator of a country’s ability to provide its citizens with a rising standard of living. However, it is not a perfect measure of a country’s economic well-being. For example, the growth of GDP in a country may not reflect the amount of money that people are spending on health care, education, or recreational activities.
Moreover, the GDP calculation does not take into account certain phenomena that affect citizens’ well-being, such as traffic jams and pollution. Moreover, because GDP is measured at purchaser’s prices, it does not consider the quality of the goods and services being purchased. For example, computers that are more powerful than those of the past do not raise GDP because they are just replacing older ones; however, the increased productivity of the old machines does increase the economy.
Growth in advanced economies is projected to slow this year and next amid rising trade barriers and elevated uncertainty. In contrast, the outlook for emerging market and developing economies (EMDEs) is brightening on the back of faster-than-expected global disinflation.