Analyzing GDP, GDP per capita and GDP growth rate


#1

What was the value of GDP and GDP per capita for Nepal, India China and US in 2017? What was the GDP growth rate for Nepal, India, China and US in 2017? Can you infer a discrete conclusion out of the data.


#2

The Gross Domestic Product or GDP

Guell (2015), in their book Issues in Economics Today, the Gross Domestic Product or GDP depicts the economic state or condition of the nation by providing the accurate market value of the final goods and services (finished products or services) that are produced inside the nation’s periphery during a specified time period. It is defined by the total dollar value related to the all goods and services which are produced in specific period of time. It is usually expressed as the comparison quarter or year.

Symbolically,

∴ GDP= C+G+I+(X-M)
Where,
C = Consumption
G = Government Spending
I = Investments
X = Exports
M = Imports

And,

Gross Domestic Product per Capita

When Gross Domestic Product is divided by total number of people in the country then we expect Gross Domestic Product per Capita. The per capita GDP is useful comparing one country to another as it shows performance of the countries. GDP per capita of the nation is usually expressed in U.S. dollar. It helps in indicating the economic performance of the nation as it showcases the consumption power of the people of one nation to another and conclusively compares the average living standard, quality of life and economic welling of the various countries (Fox, 2012).

∴GDP Per Capita = Total GDP of country/ Total Population

∴GDP Growth rate = (GDP in current year/ GDP in base year) -1

GDP and GDP per capita of Four Nation

GDP and GDP Growth Rates of Nepal, India, China, and U.S. (2017 data)

Country GDP GDP per capita GDP Growth Rate
United States $19,390.60 USD Billion 59,501 USD 2.30%
China $12,237.70 USD Billion 8,643 USD 6.90%
India $2,597.50 USD Billion 1,983 USD 6.60%
Nepal $24.50 USD Billion 834 USD 7.50%

Source: IMF : World Economic Outlook (WEO) Database, April 2018

The above table illustrates the statistical data regarding gross domestic product, GDP per capita, and GDP growth rate of four countries i.e. United States of America (USA) ($19,390.60 USD Billion), China ($12,237.70 USD Billion), India ($2,597.50 USD Billion), and Nepal ($24.50 USD Billion) for 2017. As we can vividly see that, USA had massive GDP ($19,390.60) in the year 2017 in comparison to other three nations i.e. China, India, Nepal. China followed the USA by accumulating USD $12,237.70 billion which is significantly higher than India and Nepal. And, India also had strong GDP in comparison to Nepal’s. Nepal has the lowest GDP out of the four countries.

Likewise, if we view and assess the GDP per capita of these four nations we can clearly see that the citizens of United States rejoice or live better or quality life than other countries. In 2017, the GDP per capita of USA was 59,501 USD which means that per citizens of United States have consumption power of this amount. On the other hand, in 2017 China had significantly lower GDP Per capita than the USA i.e. 8,643 USD however, comparatively higher than other two nations i.e. India and Nepal (1,983 USD and 834 USD) (World GDP per Capita Ranking 2017, 2018). It means that the average standard of living and economic welling of China is way better than India and Nepal. Out of these four nations Nepal had the worse and lowest GDP per capita which depicts that the living condition and quality of Nepalese citizens on average is detrimental.

To sum up, GDP is the economic measurement of final goods and service produced in a country within a year. GDP per capita is the per person contribution in an economy. Higher GDP per capita is good for economy as it indicates higher standard of living. Furthermore, the GDP data generated of different country presents the GDP of each country. Among four countries, United States has highest GDP followed by China, India and Nepal.

References

Fox, J. (2012). The economics of well-being. Harvard Business Review, 90 (1-2), 78-83.

Guell, Robert C. (2015). Issues in Economics Today , 7th edition- 2015 ISBN: 978-0078021817

World GDP per Capita Ranking 2017. (2018). In zambiamf. Retrieved from http://zambiamf.opendataforafrica.org/sijweyg/world-gdp-per-capita-ranking-2017-data-and-charts-forecast


#3

Gross domestic product (GDP) is the market value of all final goods and services produced within the geographic boundaries of a country in a given period of time. In other words, it is the dollar value of all of the goods and services produced for final sale in a country in a year (Guell, 2012). It is the indicator of the economic performance of a country and is calculated by adding personal consumption, business investment, government spending, and export minus import. The standard formula for calculating GDP is GDP= C+I+G+ (X-M).

Nepal is a developing country who employs 70 percent of the population in agriculture. The Gross Domestic Product(GDP) value of Nepal is 0.04 percent of the world economy. The GDP was worth 24.47 billion US dollars in 2017. GDP in Nepal averaged 5.74 USD Billion from 1960 until 2017, reaching the all-time high of 24.47 USD Billion in 2017 and a record low of 0.50 USD Billion in 1963 (see figure 1)

Similarly, the GDP per capita in Nepal was 728.40 US dollars in 2017 which is equivalent to 6 percent of the world’s average (see figure2)

Figure 1: Nepal GDP

GDP of Nepal

Figure 2: Nepal GDP per capita

GDP per Capita of Nepal

Secondly, the GDP in India was worth 2597.49 billion US dollars in 2017 where the GDP value represents 4.19 percent of the world economy (see figure3). Similarly, the GDP per capita in India was recorded at 1963.55 Us dollars in 2017 which is equivalent to 16 percent of the world’s average. (see figure4)

Figure 3: India GDP

India GDP

Figure 4: India GDP per capita

India GDP per capita

Thirdly, The gross domestic product of China is increasing yearly. There are the four major components that influence the growth of the gross domestic product of China i.e. consumption, investment, transnational exports and inter-provincial exports (Wu, Lei, & Li, 2015)The GDP in China was worth 12237.70 billion US dollars in 2017 that represents 19.74 percent of the world economy (see figure 5). In another side, GDP in the United States was worth 19390.60 billion US dollars in 2017 where the GDP value represents 31.28 percent of the world economy (see figure 5).

Figure 5: GDP of China and the US

GDP of China and US

Similarly, the per capita in China was recorded at 7329.09 US dollars in 2017 which is equivalent to 58 percent of the world’s average. In another side, the per capita in the US was recorded at 54225.45 US dollars in 2017 which is equivalent to 30.5 percent of the world 's average.

References

Guell, R. C. (2012). Every Macroeconomics Word You Ever Heard. Gross domestic product, Unemployment, Recession and Drepression. In R. C. Guell, Issues in Economic Today (sixth ed., p. 76). New York, United States: McGraw-Hill.

Wu, S., Lei, Y., & Li, L. (2015, Apr). Evaluation of the Contributions of Four Components of Gross Domestic Product in Various Regions in China. PLoS One, 10 (4).