Gross Domestic Product or GDP, is a term often heard in the media and used by politicians, academics, economists and others to refer to how well a country has performed. But what is GDP?
GDP represents the overall value of all the final goods and services produced in a country in a specific period. The rate at which this total value changes is referred to as the GDP growth rate.
A positive growth in GDP implies that the economy is growing in terms of an increase in output which should help create more employment, increase income and improve people’s livelihoods. The economy can also register a negative GDP growth rate which means a decline in the country’s total output and income. Factors that affect a country’s output include both supply and demand-side factors such as the impact of natural disasters, movements in domestic prices and the actual demand for goods and services both domestically and internationally.