The gross domestic product (GDP) of a country is one of the main indicators used to measure the performance of a country’s economy. The Macmillan dictionary defines economy as the system by which a country’s trade, industry and money are organised. GDP can be thought of as the total value of all goods and services produced within the borders of a country during a specific period of time, usually a year or a quarter.
Usually, GDP is expressed as a comparison to the previous quarter or year. For example, if the Q3 2017 GDP of a country is up 3%, the economy of that country has grown by 3% over the third quarter. While quarterly growth rates are a periodic measure of how the economy is faring, annual GDP figures are often considered the benchmark for the size of the economy.
Investopedia explains, “Economic production and growth, what GDP represents, has a large impact on nearly everyone within [the] economy”. When GDP growth is strong, firms hire more workers and can afford to pay higher salaries and wages, which leads to more spending by consumers on goods and services.