What is GDP and why does it continue to be revised whenever the latest figure is announced?
Gross Domestic Product (GDP) is a measure of economic activity and is often used as a major summary indicator of the health (or otherwise) of a country’s economy and, to some degree, prospects. In the UK , the first estimate of GDP (announced on a quarterly basis) is based on our output and production as an economy. It also shows how different industries are contributing to growth (or decline) and is published 3 ½ weeks after the quarter it measures. The second estimate then follows 4 ½ weeks later, based on information around output, income and expenditure. The third and final estimate is published 12 weeks after the quarter in question, around the UK National Accounts (the full national accounts). As we have recently seen, confirmation of two successive quarters of negative economic growth (i.e. a decline) falls into the technical definition of a recession.
