Size of GDP
Gross Domestic Product (GDP) is the standard measure of the value of final goods and services produced in a country during a given period of time minus the value of imports. GDP per capita is a core indicator of economic performance and commonly used as a broad measure of average living standards or economic well-being.
In 2017, the size of GDP for the OECD as a whole was USD 56 613 billion based on current PPPs. G7 countries accounted for almost 70% of that total. GDP per capita was on average USD 44 300 for the OECD area and USD 12 900 on average for the BRIICS, and there are also large disparities in GDP per capita across OECD countries. Within the OECD, GDP per capita was above USD 50 000 in Australia, Austria, Denmark, Germany, Iceland, Ireland, Luxembourg, the Netherlands, Norway, Sweden, Switzerland and the United States and less than half the OECD average in Mexico. Similar disparities exist among the BRIICS. GDP per capita in the Russian Federation was twice the BRIICS average and almost four times higher than in India.
GDP growth remains below pre-crisis rates in most countries, particularly in Finland, Greece, Spain, the Baltic States and most Eastern European economies. GDP growth has also eased significantly in Brazil, the Russian Federation and South Africa and although growth in China remains high relative to other large economies, it too has slowed considerably compared to the pre-crisis period.
Definition
Countries measure GDP in their own currencies. In order to compare these estimates across countries, they have to be converted into a common currency. The conversion is often made using current exchange rates but these can give a misleading comparison of the true volumes of final goods and services measured in the GDP. A better approach is to use purchasing power parities (PPPs), which are currency converters that control for differences in the price levels between countries and allow an international comparison of the volumes of GDP and the size of economies (Chapter 8. ).
Comparability
GDP measures are generally very comparable across countries, although not all countries have yet implemented the latest international standards for the compilation of national accounts, the System of National Accounts 2008 (2008 SNA), which can have an impact on comparisons of GDP across countries. Indeed, data reported here for Colombia are in line with the 1993 SNA. The measurement of the non-observed economy can also affect comparability as exhaustive coverage of production activities missed by the statistical system can be difficult to achieve and national estimates may differ in their coverage of non-observed activities. The size of the non-observed economy is generally larger in emerging economies reflecting, in part, the higher degree of informal activities and employment.
Population estimates are comparable across countries. However, 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, which is one of the reasons why cross-country comparisons of income per capita based on gross or net national income are also relevant.
References
OECD National Accounts Statistics (database), https://doi.org/10.1787/na-data-en.
OECD (2002), Measuring the Non-Observed Economy: A Handbook, International Labour Office, Geneva 22/IMF, Washington D.C./CIS STAT, Moscow/OECD Publishing, Paris, https://doi.org/10.1787/9789264175358-en.
