Size of GDP
Gross Domestic Product (GDP) is the standard measure of the value of final goods and services produced by a country during a period minus the value of imports. While GDP is the single most important indicator to capture economic activity, it should not be looked upon as an all-encompassing measure for societies’ well-being, as it does not include several aspects of people’s material living standards let alone other aspects of people’s quality of life.
GDP per capita is a core indicator of economic performance and commonly used as a broad measure of average living standard despite some recognised shortcomings.
Definition
What does gross domestic product mean? “Gross” signifies that no deduction has been made for the depreciation of machinery, buildings and other capital products used in production. “Domestic” means that it relates to the output produced on the economic territory of the country. The products refer to final goods and services, that is, those that are purchased, imputed or otherwise, as: the final consumption of households, non-profit institutions serving households and government; gross capital formation; and exports (minus imports).
Comparability
All countries compile data according to the 2008 SNA “System of National Accounts, 2008” with the exception of Chile, Japan, and Turkey, where data are compiled according to the 1993 SNA. When changes in international standards are implemented, countries often take the opportunity to implement improved compilation methods; therefore also implementing various improvements in sources and estimation methodologies. In some countries the impact of the ‘statistical benchmark revision’ could be higher than the impact of the changeover in standards. As a consequence the GDP level for the OECD total increased by 3.8% in 2010 based on the available countries.
For some countries, the latest year has been estimated by the Secretariat. Historical data have also been estimated for those countries that revise their methodologies but only supply revised data for some years.
For GDP per capita some care is needed in interpretation, for example Luxembourg and, to a lesser extent, Switzerland, have a relatively large number of frontier workers. Such workers contribute to GDP but are excluded from the population figures.
Per capita GDP for the OECD as a whole was USD 38 865 in 2014. Five OECD countries exceed this amount by more than 25 percent – Luxembourg, Norway, Switzerland, the United States and Ireland. Nine OECD countries had a per capita GDP that was between 10 to 25 percent higher than the per capita GDP for the OECD average in 2014: the Netherlands, Austria, Sweden, Germany, Australia, Denmark, Canada, Iceland and Belgium while nine countries had a more than 25 percent lower GDP per capita than the OECD average: Mexico, Turkey, Chile, Poland, Hungary, Greece, Estonia, the Slovak Republic, and Portugal.
In the ten year time period between 2004 and 2014, the countries whose GDP per capita relative to the OECD average has increased the most (by more than 10 percentage points) were Luxembourg, the Slovak Republic, Estonia, Poland, Switzerland, Norway, Chile, and Turkey.
On the other hand, the relative position of GDP per capita to the OECD average has deteriorated in 14 countries. The largest decreases were observed in Greece, the United Kingdom, and Italy.
Sources
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OECD (2015), National Accounts of OECD Countries, OECD Publishing.
Further information
Analytical publications
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OECD (2015), OECD Economic Outlook, OECD Publishing.
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OECD (2015), OECD Economic Surveys, OECD Publishing.
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OECD (2015), Towards Green Growth, OECD Green Growth Studies, OECD Publishing.
Statistical publications
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OECD (2015), National Accounts at a Glance, OECD Publishing.
Methodological publications
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OECD, et al. (eds.) (2010), System of National Accounts 2008, United Nations, Geneva.
Online databases
Websites
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Sources & Methods of the OECD Economic Outlook, www.oecd.org/eco/sources-and-methods.htm.
