Saturday, March 01, 2008

GDP - An Indicator of economy


Today, I venture out of the small box concerning music, movie and dentistry stuff. GDP or known as gross domestic product is an economic indicator for measuring the size. Defined as the total market value of all final goods and services produced within a country in a given time, the uses of GDP is greatly used worldwide to analyse economic health.

According to wikipedia, GDP is counted based on the following formula (correct me if I'm wrong, dear economists!!)

GDP* = Consumption (C) + Gross Investment (I) + Government spending (G) + (Exports - Imports)

*Note:
(C) Consumption is the total of purchase of currently produced good and services out of income, savings or borrowed funds, denoted as private consumption that includes personal expenditures.

(I) Investment is the production per unit time of goods which are not consumed but are to be used for future production, denoted as investments by business or households in capital like construction of new mine or purchasing of machinery.

(G) Government Spending is the total of consumption and investment on the government side which include servants' salaries, or purchase of weapon fire.

**Not to confused with Gross National Product (GNP), GNP adds net foreign income rather than the the net exports.

In recent statement by Bank Negara Malaysia, Malaysia's GDP grow by 6.3% in 2007, better than many expert's expectation. Strong growth is a keen sight to define a healthy growth of economy. Some may wonder, it is so coincide with the general election fever!!

According to various sources like CIA.com, IMF and World Bank, GDP of Malaysia at 2007 is estimated at US$ 165 billion on 2007

1 comment:

Anonymous said...

hey,....seriously cool stuff u got ere...
at least my general knowledge is enhanced...i hope.. =P
keep it up

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