GDP growth. Gross domestic product (GDP) is the monetary value of all goods and services produced in a country. The data is widely used to compare the differences between two economies and forecast their growth.
When GDP increases, it can have a knock-on effect to other indicators on this list, such as employment rates, as companies take on more employees and increase manufacturing.
If a country has a consistent GDP growth rate, it is a good sign that the economy is stable. However, rapidly growing GDP rates are often met with criticism. Some analysts argue that is only too easy to manipulate GDP figures, with programmes such as quantitative easing or excessive government spending. For example, up until 2019, India was heralded as the fastest-growing major economy with annual GDP rates of 7% but, after finding a flaw in the measuring process between 2011-2017, it appears this rate was actually 4.5%.
As a lagging indicator, there is only so much GDP can tell traders and investors. However, the theory goes that if the GDP rate declines two quarters in a row, then the economy is entering a downturn or recession.
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