GDP-Gross Domestic Product

Gross domestic products (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period, often annually. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries .
The GDP growth rate is driven by the four components of GDP. The main driver of GDP growth is personal consumption. This includes the critical sector of retail sales. The second component is business investment, including construction and inventory levels. Government spending is the third driver of growth. Its largest categories are Social Security benefits, defense spending, and Medicare benefits. The government often increases spending to jump-start the economy during a recession. Fourth is net trade.

GDP can be determined in three ways, all of which should, in principle, give the same result. They are the production (or output or value added) approach, the income approach, or the speculated expenditure approach.

GDP growth indicates that the economy is doing well, and that national wealth is increasing. Negative GDP growth (i.e. GDP falls from one period to the next) correspondingly indicates declining economic growth and is an indication that something is wrong in the economy. Usually, if GDP growth is slow or negative, unemployment (number of people who have no jobs) in the country rises, as production has fallen, hence producers fire people to reduce costs.

Few countries like Germany and Japan depend on Exports (trade surplus) for their growth. China depended on exports and investments for their growth.

India does not have a trade surplus but the domestic consumption figures are big, mostly coming from services sector than manufacturing, making it a consumption based services driven economy.