Page 29 - Policy Economic Report - October 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Types of GDP

Nominal GDP

Nominal GDP is an assessment of economic production in an economy that includes current prices in its
calculation. All goods and services counted in nominal GDP are valued at the prices that those goods and
services are sold for in that year. Nominal GDP is used when comparing different quarters of output
within the same year. When comparing the GDP of two or more years, real GDP is used. This is because,
in effect, the removal of the influence of inflation allows the comparison of the different years to focus
solely on volume.

Real GDP

Real GDP is an inflation-adjusted measure that reflects the number of goods and services produced by an
economy in a given year, with prices held constant from year to year to separate out the impact of inflation
or deflation from the trend in output over time. Since GDP is based on the monetary value of goods and
services, it is subject to inflation.

Rising prices tend to increase a country’s GDP, but this does not necessarily reflect any change in the
quantity or quality of goods and services produced. Thus, by looking just at an economy’s nominal GDP, it
can be difficult to tell whether the figure has risen because of a real expansion in production or simply
because prices rose.

GDP per capita

GDP per capita is a way to achieve economic well-being that considers both the size of a country's
economy and its population. The gross domestic product (GDP) divided by a country's population is a
useful measure of the level of living and economic prosperity in that country. It indicates that the amount
of output or income per person in an economy & can indicate average productivity or average living
standards. GDP per capita can be stated in nominal, real (inflation-adjusted), or purchasing power parity
(PPP) terms.

India’s rank in GDP

Rank Country GDP (in U.S. dollars) Annual Growth rate
2.7%
1 United States of America 28.78 trillion 4.6%
0.2%
2 China 18.53 trillion 0.9%
6.8%
3 Germany 4.59 trillion

4 Japan 4.11 trillion

5 India 3.94 trillion

Source- Data and rankings as per International Monetary Fund (IMF)

India is now the fifth-largest economy in the world GDP rankings list due to its strong economic
foundations, thriving domestic demand, careful financial management, high saving rates and favorable
demographic trends. The country's major economic contributors are traditional and modern agriculture,
technology services, and business outsourcing.

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