Gross Domestic Product (GDP) is the broadest quantitative measure of a nation’s total economic activity. More specifically, GDP represents the monetary of all goods and services produced within a nation’s geographic borders over a specified period of time.
The Equation used to calculate GDP is as follows:
GDP= Consumption+Government Expenditures+Investments+Exports-Imports
Why it’s Important
When GDP declines for two consecutive quarters or more, by definition the economy is in a recession. Meanwhile, when GDP grows too quickly and fears of inflation arise, the Reserve Bank often attempts to stimulate the economy by raising interest rates.
Global Growth & Forecast
Global growth, currently estimated at 3.1 % in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017. The pickup in global activity is projected to be more gradual than October 2015 as per World Economic Outlook (WEO), especially in emerging market and developing economies.
Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalized slowdown in emerging market economies, China’s rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States. If these key challenges are not successfully managed, global growth could be derailed.
BRICS NATION’S GDP
BRAZIL: There is a phenomenal increase in the size of GDP over past decade in Brazilian economy from $ 892 bn in 2005 to $ 2.39 tn in 2013 with service sector output @70% in 2013. This concludes that Brazilian economy is driven by the service sector.
RUSSIA: Based on data from World Bank it can be easily said that Russian economy is service sector driven economy as the service sector shares 59.78 % of GDP which is 5% increase when compared to output from 2005 while other sectors like Agriculture and Manufacturing decreased by approxmatly 20%. The size of the economy also decreased by 79% when compared to 2005. Total size of GDP at $ 1.34 tn in 2013.
INDIA: As we all know that India is a developing economy, it was once an Agricultural economy where Agricultural sector was a major contributor to GDP. Now as the world became a global market, India too started contributing to it with new found strength in service sector. It soon became a service economy with contributing 51% of GDP in the year 2013. However, there is an increase in 123% in GDP size while a decrease in growth rate by 26% when compared to 2005 growth rate.
CHINA: Chinese economy is a faster-growing economy with most of its strength in Manufacturing and service sector contributing 31% and 47% of GDP respectively. Its GDP size increased by 3 times over the past decade. However, like Indian economic growth rate, Chinese economy also decreased from 11.35% in 2005 to 7.68 in 2013 total decrease of 32%.
BRICS REACH 30 PERCENT OF GLOBAL GDP
The share of BRICS countries in global GDP has reached 30 percent as per Russian Minister of Economic Development- Alexei Ulyukayev, who said at the Meeting of the BRICS Trade Ministers in Moscow. Trade between the BRICS countries in 2014 was up more than 70 percent to USD 291 billion, he pointed out.
Our countries accounted for over 17 percent of global trade, 13 percent of the global services market and 45 percent of the world’s Agricultural output in 2014 “Mr Ulyukayev noted, adding that the combined GDP of the BRICS countries surged from USD 10 trillion in 2001 to USD 32.5 trillion in 2014.
|GDP ANNUAL GROWTH RATE(%) FROM 2005-2014|