GDP Presentation
15
GDP Growth Rate Presentation By: Muhammad Zain Ali Shah
Transcript of GDP Presentation
GDP
Growth RatePresentation By:
Muhammad Zain Ali Shah
Background:
In the mid-1930s, two Keynesians, Simon Kuznets and
Richard Stone, began to develop this terminology. They
developed national income accounting, a set of rules and
definitions for measuring economic activity in the
aggregate economy.
W h a t i s G D P ?
• Gross Domestic Product
• Used to measure the health of a country's economy
• The total dollar value of all goods and services produced in a country over a specific time period
• Uses as a comparison to the previous year
Approaches of calculating GDP:
3. Expenditure approach
GDP = C + I + G + Xn
2. Income approach
1. Production approach
Production Approach
• Determine the intermediate
consumption, i.e., the cost of material,
supplies and services used to produce
final goods or services.
• Deduct intermediate consumption from
gross value to obtain the gross value
added.
• GDP = gross value of output – value of
intermediate consumption.
Income Approach
Computing GDP:G D P =
C o m p e n s a t i o n o f e m p l o y e e s
+
R e n t
+
I n t e re s t
+
P ro p r i e t o r ’s I n c o m e
+
C o r p o r a t e P ro f i t s
+
I n d i re c t b u s i n e s s t a x e s
+
D e p re c i a t i o n
+
N e t f o re i g n f a c t o r i n c o m e
The economy is divided into four
sectors:
• Household
• Business
• Government
• Foreign sector
Expenditure Approach
Consumption
e.g., durables and nondurables[C]
Investment
e.g., business investment in equipment and factories
[I]
Government Spending
e.g., government purchases of goods and services
[G]
Net Exports
exports to other countries, less imports
[X]Computing GDP:
GDP = C + I + G + Xn
The Economy of Pakistan:
• Developing country
• Its economy is the world’s 27th largest economy in the term of purchasing
Year Gross Domestic Product US Dollar Exchange
1960 20,058 4.76 Pakistani Rupees
1965 31,740 4.76 Pakistani Rupees
1970 51,355 4.76 Pakistani Rupees
1975 131,330 9.91 Pakistani Rupees
1978 283,460 9.97 Pakistani Rupees
1985 569,114 16.28 Pakistani Rupees
1990 1,029,093 21.41 Pakistani Rupees
1995 2,268,461 30.62 Pakistani Rupees
2000 3,826,111 51.64 Pakistani Rupees
2005 6,581,103 59.86 Pakistani Rupees
2014 104.14 Pakistani Rupees
2000 4.3 2010 1.6
2001 2 2011 2.8
2002 3.2 2012 4
2003 4.8 2013 6.1
2004 7.4
2005 7.7
2006 6.2
2007 4.8
2008 1.7
2009 2.8
Year GDP Rate Year GDP Rate
Comparison of GDP between Pakistan and India
Year GDP
Rate
Year GDP
Rate
2000 3.8 2010 10.3
2001 4.8 2011 6.6
2002 3.8 2012 4.7
2003 7.9 2013 5
2004 7.9
2005 9.3
2006 9.3
2007 9.8
2008 3.9
2009 8.5
Year GDP
Rate
Year GDP
Rate
2000 4.3 2010 1.6
2001 2 2011 2.8
2002 3.2 2012 4
2003 4.8 2013 6.1
2004 7.4
2005 7.7
2006 6.2
2007 4.8
2008 1.7
2009 2.8
Comparison of GDP growth rate
between Pakistan and India
PakistanIndia
• Unemployment
• Lack of foreign investment
• Low rate of capital formation
• Low level of productivity
• Illiteracy
• Corruption
• Law & order
• Population pressure
Reasons of Downfall of GDP
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