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Current Affairs

GDP registers positive growth

Date: 27 February 2021 Tags: Basics of Economics

Issue

 The economy expanded 0.4% in the December quarter to emerge from a pandemic-induced recession. 

 

Background

The recovery is expected to strengthen as the country’s vaccination programme gathers steam and consumers become more confident to travel, dine out and shop.

 

Details

  • Data released by the National Statistical Office (NSO) showed GDP contractions for June and September quarters were revised to 24.4% and 7.3%, respectively, against earlier estimates of 23.9% and 7.5%. 

  • The return to economic growth was helped by the resumption of economic activity as the government lifted lockdown restrictions and boosted spending. 

  • The government’s final consumption expenditure rose after contracting in the first two quarters, supporting economic recovery.

  • While crude oil, natural gas, refinery products, and cement output continued to contract in January, steel and electricity output continued to expand. 

 

GDP

  • Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period.

  • GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate.

  • GDP can be calculated in three ways, using expenditures, production, or incomes. It can be adjusted for inflation and population to provide deeper insights.

 

Nominal GDP

Nominal GDP measures a country's gross domestic product using current prices, without adjusting for inflation. 

 

Real GDP

Real GDP is a measure of a country's gross domestic product that has been adjusted for inflation. 

 

GDP at PPP

Purchasing power parity (PPP) allows for economists to compare economic productivity and standards of living between countries.

 

Recession

A recession is a situation of declining economic activity. Declining economic activity is characterized by falling output and employment levels.