difference in the GDP of a given country
Introduction
Gross domestic product GDP is essential and the most common indicator used in tracking the economic health of a nation. It refers to the monetary value of all the finished goods ad services produced with the borders of a given country in a given period. This includes everything produced both by the citizens and foreigners of the country. The GDP often includes various factors, such as the element of consumption and investment. The value of GDP change indicates the country’s economic position, that is, whether the country’s economy is improving or worsening. The difference in the country’s GDP often occurs in four main phases of the business cycle (Kumar, 2017). These include; the peak, contraction, trough, and expansion. When an economy expands, the growth in the value of GDP always indicates positive growth. A country with a growing economy means that the business, jobs, and personal incomes are also increasing at the same time. Equally, when the GDP of a country is deteriorating or decline in the change in the GDP indicates a negative turn. The difference in the GDP is often reflected as a percentage of the initials GDP. This report analyzes the difference in the GDP of a given country.
Methodology
The study used a quantitative method where data for a GDP of a country X was collected against the prime rate for the same country for a period of ten years ranging from the year 2009 to 2019. However, the value of the GDP for the ten years was recorded from the national bureau of statistics and the percentage change in the GDP, and the principal importance was established from the data. Don't use plagiarised sources.Get your custom essay just from $11/page
Data presentation
Below is the raw data for the prime rate against the percentage change in the GDP for the country for a period of 10 years.
| Years | Prime Rate | Percent change in real GDP |
| 2009 | 3.25% | -2.50% |
| 2010 | 3.25% | 2.60% |
| 2011 | 3.25% | 1.60% |
| 2012 | 3.25% | 2.20% |
| 2013 | 3.25% | 1.86% |
| 2014 | 3.25% | 2.50% |
| 2015 | 3.25% | 2.90% |
| 2016 | 3.50% | 1.60% |
| 2017 | 3.88% | 2.40% |
| 2018 | 4.58% | 2.90% |
| 2019 | 5.50% | 2.30% |
The data from the country’s information on the prime rate against the GDP was used to produce a comparative bar graph to depicting the information for the ten years period.
Analysis and discussion
With the prime rate (value of lending by commercial banks) remaining reasonably constant for the first seven years, the amount of the percentage change in the real GDP kept on changing over time. In 2009, the country witnessed a fall or decline in the GDP. This can be attributed to various factors in the economy other than the rising interest rate since that was constant. Such other factors that might have resulted in the -2.50% decline in the GDP includes a reduction in government spending, environmental factors, or the changes in customer spending, which might have declined dramatically. After 2009, the percentage change in the value of the real GDP indicated a positive change although, in different extents, the years 2010 witnessed a change of 2.60%, 2011 was 1.60%, 2012 was 2.2%, 2013 was 1.86%, 2014 was 2.50%, 2015 was 2.90%, 2017, 1.60%, 2018, 2.90 % and 20192,30%. This positive change in the value of the GDP can be attributed to a relatively constant commercial banks’ lending rates- which works in lowering the cost of borrowing and increase the consumer spending and investing ability, raised capital, increase in the working population, and increased productivity of labor.
From the graph, it can be seen that the most significant percentage change in the real GDP was witnessed in two years 2015and 2018 with a value of 2.90%. The prime rate for the four years 2016, 2017, 208, and 2019 did change with a positive change in the GDP, indicating that the economy of the country does not significantly rely on the prime rate charged by banks. However, despite the increase in the lending rate by the commercial banks, the percentage change in the GDP did not register a negative turn. This indicates that the country’s economy is reasonably stable and is not affected by a single factor that affects the value of a country’s GDP. Advances in technology use and new product development can exert positives influences on economic growth as well. The increase in demands from the foreign market can also result in higher expert and impact on the value of GDP positively (Moyer, B., & Dunn, 2020).
Conclusion
The GPD of a country often represents the position of a country in terms of economic growth. A country whose percentage change GPP is negative shows a significant positive change that depicts one with status or declining economic growth. When this is tracked over time, the economic growth rate suggests the overall economic direction of that particular nation and the magnitude of the growth of the country. The information on economic growth is often used by government and financial institutions in planning and making critical decisions. It also measures the level of development of the individual’s citizens.
References
Kumar, V. (2017). CROSS COUNTRY ANALYSIS OF GROSS DOMESTIC PRODUCT (GDP) OF BRICS NATIONS: AN ASSESSMENT AND NEW EVIDENCE.
Moyer, B., & Dunn, A. (2020). Measuring the Gross Domestic Product (GDP): The Ultimate Data Science Project. Harvard Data Science Review, 2(1).