Sources for GDP Data
The world bank hosts one of the most reliable web-based databases. It has one of the best and most comprehensive lists of countries for which it tracks GDP data. The International Money Fund (IMF) also provides GDP data through its multiple databases, such as World Economic Outlook and International Financial Statistics.
Highly reliable source of GDP data is the Organization for Economic Cooperation and Development (OECD). The OECD provides not only historical data but also forecasts for GDP growth.
The disadvantage of using the OECD database is that it tracks only OECD member countries and a few nonmember countries.
Importance of GDP
GDP is used as an indicator for most governments and economic decision-makers for planning and policy formulation
In case of GDP, each component is given the weight of its relative price. In market economics it clicks as prices reflect both marginal cost of the producer and marginal utility for the consumer, i.e. people sell at a price that others are willing to pay
GDP helps the investors to manage their portfolios by providing them with guidance about the state of the economy
Calculation of GDP provides with the general health of the economy. A negative GDP growth portrays bad signals for the economy. Economists analyse GDP to find out whether the economy is in recession, depression or boom
- Expenditure approach,
- Income approach
- Value-added approach
Following is a simple way to calculate the GDP. GDP = consumption + investment + government spending) + (exports-imports) and the formula is GDP = C + I + G + (X-M)
C= spending by consumers,
I= investment by businesses,
G= government spending and
(X-M)= net exports, that is, the value of exports minus imports. Net exports may be negative i.e. imports are more than exports.