What is Gross Domestic
GDP is the most widely
reported measure of a
What does GDP
The market value of all
final goods and services
produced in a nation
during a period of
time, usually a year
What is an advantage of
GDP measures value
using dollars, rather
than a list of the
number of goods and
Commonly the Expenditure Method is used for measuring and
GDP = C + I + G+(X-M)
GDP = consumption + gross investment
+ government spending
+ (exports – imports)
(Export - Import)
Nominal GDP, is the value of all final output
produced in an economy during a given
year, calculated using the prices current in
the year which the output is produced.
Real GDP is the value of the final goods and
services produced calculated using the prices
of some base year.
Nominal Vs. Real
Nominal GDP is GDP calculated at existing
Real GDP is nominal GDP adjusted for
Real GDP is important to society because it
measures what is really produced.
LIMITATIONS OF GDP…
that every monetary transaction adds to well-
everything that happens outside the realm of
crime, divorce and natural disasters as economic
the non-market economy of household and
• treats the depletion of natural capital as income
• takes no account of income distribution
• ignores the drawbacks of living on foreign assets
INDIA GDP ANNUAL GROWTH RATE
The Gross Domestic Product (GDP) in India expanded 4.40 percent
in the second quarter of 2013 over the same quarter of the previous
year. From 1951 until 2013, India GDP Annual Growth Rate
averaged 5.8 Percent reaching an all time high of 10.2 Percent in
December of 1988 and a record low of -5.2 Percent in December of
INDIA’S ECONOMY EXPANDS 4.4% IN Q2
The economic activities which registered significant
growth in Q2 were: financing, insurance, real estate and
business services at 8.9 percent and community, social
and personal services at 9.4 percent. The estimated
growth rates in other economic activities are: 3.9 percent
in trade, hotels, transport and communication; 3.7 percent
in electricity, gas & water supply; 2.8 per cent in
construction; 2.7 percent in agriculture, forestry & fishing.
Manufacturing and mining activities decreased 1.2 percent
and 2.8 percent respectively.
According to the latest estimates available on the Index of
Industrial Production, the indexes of
mining, manufacturing and electricity declined 4.5
percent, 1.2 percent and 3.5 percent respectively during
the second quarter. In comparison, in the first
quarter, mining decreased by 1.6 percent, manufacturing
by 0.8 percent and electricity grew by 6.4 percent
India's GDP Growth Pegged At 5 Percent For
Current Fiscal Year; Government Data Indicates
Lowest Growth Rate Since 2002
India's gross domestic product (GDP) is estimated to grow an annual rate of 5 percent in the
2012/13 fiscal year, much below the consensus estimate of 5.5 percent.
The projection by the statistics department came as a shocker as it is the lowest growth projection
issued by the government and the Reserve Bank of India, since 2002.
The finance ministry had projected the economy to grow at 5.7 to 5.9 percent during the
year, while the RBI had predicted 5.4 percent growth in GDP -- the worst since 2002/03 -- for the
fiscal year ending March 31, 2013.
The International Monetary Fund estimated that India’s economic growth will fall at a worsethan-expected rate of 5.4 percent for the current financial year.
India’s slowdown has been faster than expected, with first
quarter GDP growing just 5.3 percent.
1.: FY13 growth forecast to 5.4 percent and FY14 forecast to 6.2 percent. And if drought conditions worsen growth
could drop to 4.9 percent this year.
Power outages are impacting growth: The recent power outage that left 50 percent of the country in
darkness, and “anecdotal evidence of worsening power shortages” are all impacting growth. What’s more notified
power cuts are at record highs and do not cover a massive chunk of the country that isn’t connected to the power
3. Consumer confidence is low and could impact consumption: Unlike the slowdown in investment which is well
recorded, declining consumer confidence shows that consumption which has been stable could slow too.
The weakness in the rupee isn’t helping exports, and exports are
impacted by global demand: The share of exports in GDP has
increased and while the weakness in the rupee would be
expected to boost exports, the composition of India’s exports is
dominated by high-value goods, so the weaker rupee is unlikely
to have a major impact. Rather exports will be affected by global
demand. Export growth is expected to be soft in coming months