The measure of economic activity reflects the amount of goods and services produced by a country. It is calculated at purchaser’s prices (excluding indirect taxes and subsidies) for market economies with a single currency. GDP is not adjusted for depreciation of fabricated assets or for the depletion and degradation of natural resources. It is normally measured by a national statistical agency. Data are available for a wide range of countries and territories, including sovereign states, non-sovereign dependent territories and economies in transition.
Global GDP Growth
The IMF’s latest update on global GDP shows that, despite a sharp contraction in Q1 2020, the world economy is recovering slowly. In 2021, the average pace of real GDP growth is expected to be 3.0 percent.
However, there is much more that could go wrong with the global economy over the next couple of years than there is that can go right. A slowdown in China would hit the rest of the world, especially those emerging and developing economies that trade closely with China.
A weaker global recovery would hurt the United States more than other advanced economies, because it would reduce demand for American products. And a trade war between the United States and China could damage both economies, even if it does not result in any actual tariffs being imposed. This is because both countries are major exporters of steel and aluminum, which are critical inputs to manufacturing. In addition, the Chinese economy is highly integrated into global value chains, so its growth has a ripple effect on the rest of the world.