Global GDP is the total market value of all final goods and services produced in a world economy. It is a measure of a country’s economic output and a key indicator for measuring global economy trends. However, the GDP concept has several limitations. For example, it ignores the value of informal or unrecorded economic activity such as under-the-table work, underground markets, and unpaid volunteer labor. It also fails to consider the environmental cost of a nation’s economic activities and its impact on income inequality. Additionally, GDP focuses on the quantitative dimension of economic activity without accounting for its qualitative dimensions such as human well-being. As a result, rapid GDP growth may not reflect overall development and can be a sign of rising income inequality.
There are three main methods for calculating GDP. The most widely used method is the Purchasing Power Parity (PPP) approach, which reflects the exchange rate between currencies at the time of measurement. The other two methods are the production approach and the income or “speculative expenditure” approach. The production approach measures the sum of all production from a nation, including capital investment and exports. It excludes intermediate consumption, which is the cost of materials, supplies and services used to produce final goods and services, and imports.
This chart shows quarterly year-on-year real GDP growth by country. The red bar indicates the global average, while the blue lines show the quarterly growth for each of the four regional groupings: advanced economies (AEs), emerging market and developing economies (EMDEs), sub-Saharan Africa and other (all other EMDEs). Data for individual countries/territories are shown by links in the table header.
About the Author
