“A weak currency is the sign of a weak economy, and a weak economy leads to a weak nation.”
– Ross Perot

The main protagonist in the fundamental play of economics. The Gross Domestic Product report or more popularly known as GDP, assumes the lead role in a country’s economy. It is the measurement of the status of the state as a whole and is usually released at 8:30 am EST during the final day of each quarter and reflects the preceding quarter. It is an aggregated monetary value of all the goods and services, excluding international activities, provided by the entire economy during a quarter.

The GDP growth rate is the main indicator on how well the state performed during the period. It reflects the manufactured goods within its territory on a specified period but it doesn’t include the cost to produce those goods.

An average of 2.5-3% growth per year is healthy and sustainable. But difficulty arises when the GDP is above that rate, it is highly unsustainable and may lead to a high inflation. Before an ‘overheated’ economy occurs, governments usually takes preliminary measures to slow down the growth.

On the other hand, a growth below that rate would usually lead to an increase in unemployment and decrease in spending.

Each initial GDP report is revised twice. The “advance” report is followed by the “preliminary” report with a month later and then followed by a final report a month after that. It is reported in two forms: Current dollar and Constant dollar.

From the name itself, it could be figured out that the Current dollar GDP is calculated using the current dollar and provides comparison between time periods. It is the most recent calculation of the GDP in terms of the current year’s dollar and it doesn’t account for changes in the rate of inflation from one period to another.

The Constant dollar GDP converts the current information into some standard era dollar. In the process, it factors out the effects of inflation and allows an easy comparison between periods.

GDP is sometimes confused with GNP or Gross National Product. The GDP only includes the goods and services produced within the territory while GNP includes those goods and services produced by companies operating outside the country’s boundary.

Stephen Stevenson.