Gross Domestic Product, or GDP for short, is like the lifeblood of our economy. It’s the heartbeat that measures the vitality of a nation. Now, I know the term might sound intimidating, but trust me, it’s not as complicated as it seems. So, stick around as I unveil the secrets behind GDP, demystifying the enigma and empowering you with knowledge!
WHAT IS GROSS DOMESTIC PRODUCT ALL ABOUT?
Gross Domestic Product (GDP) is a measure used to gauge the size and health of a country’s economy. It represents the total value of all goods and services produced within a specific period, usually a year. GDP helps us understand how much an economy is growing or contracting. It includes everything from the food we eat to the cars we drive, providing a snapshot of a nation’s economic activity and its overall well-being.
“It represents the total value of all goods and services produced within a specific period.”
I recently analyzed GDP to see countries whose economies are performing excellently and those that are not.
Using Kaggle, I found a dataset that met the needs of my analysis. The data included columns such as Continent, Country, Population, Country Rank, GDP per Capita, United Nations (UN) GDP, and International Monetary Fund (IMF) GDP. The data was fit, so it did not require any transformation.
You might be wondering why there are three (3) different GDPs. Let me go into details a bit.
GDP per capita divides the total GDP of a country by the population, giving an average income per person. It helps assess the economic well-being and standard of living within a country by providing a per-person perspective.
The United Nations (UN) and the International Monetary Fund (IMF) have different approaches to calculating GDP. The UN focuses on providing a comprehensive view of a country’s economic activity, including non-market activities like unpaid household work. The IMF, on the other hand, emphasizes market-based activities and international trade. Both organizations aim to measure and analyze GDP, but their methodologies may vary, resulting in different GDP figures.
The first dashboard in the report gives us insights into population and country ranking. India has the largest population, followed closely by China and a difference of 2956. Montserrat has the lowest population of just 4. Asia accounted for more than half of the world’s population at 57%, while Oceania accounted for less than 1% of the world’s total population.
The number one ranked country globally is the United States of North America. China is ranked 2nd globally and first in Asia. Germany ranks third globally and the first in Europe. Brazil ranks 10th globally and the first in South America. Australia is ranked 12th globally and the first in Oceania. Nigeria is ranked 26th globally and the first in Africa.
The GDP per capita gives an estimate of the average income of one person. The total GDP per capita of the 212 countries stood at $4.17M. Monaco has the highest GDP per capita, meaning that the citizens have the highest standard of living. Burundi has the lowest GDP per capita, meaning the citizens have the lowest standard of living, in the world. Europe has the highest GDP per capita at 49%, this could be due to industrialization that has been and is still occurring. Africa and South America have low GDP per capita; this could be due to the underutilization of resources and the slow pace of industrialization in these regions.
As earlier mentioned, the United Nations (UN) approach to calculating GDP involves counting non-market activities. The total UN GDP stood at $75 trillion. According to the UN, the US has the highest GDP at $18B. Tanzania and Taiwan had the lowest GDP of $0. Asia had the highest GDP of 34%, all of which could be because of the fast pace of industrialization and ever-growing development in Countries such as China, India and Japan.
In contrast to the UN model of calculating GDP, the International Monetary Fund (IMF) does not include non-market activities in its counting. The global GDP according to IMF stood at $110T. No country other than the US has the biggest GDP of $26B according to the IMF while countries such as Afghanistan, Cuba, Cook Islands…had a GDP of $0. Asia accounted for 39% of the total GDP. Oceania accounted for less than 2% of the total GDP.
If you wish to view the report, click here!
I hope that you have learned a bit about GDP. The U.S. economy is the best-performing economy with close competition from China. Ukraine is the worst-ranked country due to the war. I do hope your country’s economy is performing well :)