What is GDP (Gross Domestic Product)?
GDP measures the total output of an economy, calculated three equivalent ways: production (sum of value added across industries), expenditure (consumption + investment + government spending + net exports), or income (wages + profits + taxes - subsidies). Released quarterly in most countries (US: Bureau of Economic Analysis; India: MoSPI). Real GDP adjusts for inflation; nominal GDP does not.
Why it matters for investors
GDP growth is the most-cited measure of economic health. Two consecutive quarters of negative GDP growth is a common (but informal) recession definition. GDP per capita measures living standards. GDP composition tells you what drives an economy — services, manufacturing, exports, government spending. China's GDP composition is shifting from investment to consumption; India's is shifting from agriculture to services.