Gross Domestic Product (GDP) - the total market value of every finished product, whether commodities or services, produced within a country in a specific time period (usually a fiscal year) taken together.
Gross National Product (GNP) - the total market value of all finished commodities and services, produced by the production factors of a country and then disposed off through sales within a particular time period. The outputs from outsourcing of production all add to the GNP of a nation.
Per Capita Income - the total earnings of a country through all means of production in a given time period, divided by the population of that country.
The above are basically used to compare the general economic condition of a population to those of other nations.
World GDP in Economy Today
The Gross Domestic Product of an economy is computed by adding the following :
private consumption in the economy
investments in business capital
total government expenditures on finished goods and services
Net exports of the economy which implies gross imports deducted from the gross exports.
With the gross world product closing in on the $50 trillion mark, as reported by the IMF, the following countries lead in terms of GDP (in trillions of USD) :
U.S.A. close to 13.25
Japan around 4.5
Germany about 3.0
China near 2.75
U.K. around 2.5
Economy Today : Role of Global Organizations
The World Bank consisting of the IBRD and the IDA basically deal with developing nations and are concerned with :
land and agriculture
protecting the environment from all kinds of adversities
infrastructure which means the basic facilities and capital equipments required for the proper functioning of a nation
proper and corruption-free administration.
The IMF or the International Monetary Fund looks after the financial scenario of the world by monitoring the following :
balance of payments of nations.
At the same time the IMF also provides financial and technical assistance.
World GDP in Economy Today
The industrialization of traditional economy through modern technical inventions has resulted in a gradual increase in the real growth of World GDP over the years.
World GDP - Real Growth Rate (percentage change) over a few previous years was as follows :
2003 - 3.8% (40.7)
2004 - 4.9% (29.0)
2005 - 4.7% (-4.1)
2006 - 5.1% (08.5)
In 2006, among the countries Azerbaijan stood first in the growth rate of GDP with 32.5 percent, whereas Lebanon with a negative growth rate of -5.0 percent lag at the end of the list.
Economy Today : Inflation
The increase in prices as calculated against a set criterion of purchasing power of the population in a country may be described as Inflation.
It is mainly calculated through :
CPIs or Consumer Price Indexes which takes into account the prices of goods purchased by consumers.
GDP Deflator which considers the prices of goods produced.
Inflation applies a lot of pressure on people in Economy Today, which are basically faced by :
people on fixed income
the industrial sector (production)
international trade and commerce (exports)
Export and Import : Economy Today
Transfer of commodities and services from one country to another in lieu of liquid assets (cash etc.) constitutes international trade and this forms a large section of GDP of a nation.
In the case of most nations, gross exports always exceeds gross imports.
The general trend is that the technologically advanced developed nations account for the largest share of World exports but of recent developing nations like China and India are becoming increasingly major exporters in the World scenario. The export growth rate of the world during fiscal 2004 was around 22 percent, a large increase from about 6.0 percent in 2003.
In the last fiscal (2006) imports increased significantly in comparison to earlier years but nonetheless it could not exceed the slowing exports.