Civil Engineering Reference
In-Depth Information
When GDP figures are adjusted from current prices to constant prices, to allow
for inflation, it is possible to calculate the
real value
of any change in economic
activity between one year and the next. Effectively, economic growth can only be
declared if 'real' GDP has increased. If real GDP has declined, this is described as a
recession
. In the majority of years during the last half-century the recorded figures
have been positive.
Since the UK shares a common set of accounting conventions with other
countries, we can make international comparisons of GDP and GNI. Some figures
are shown for six selected countries in
Table 13.1.
The final column, which shows
GDP growth, is obviously expressed relative to economic activity in the previous
years. The term 'real' emphasises that inflation has been removed from the
calculation, with each year's GDP values being expressed at an agreed base year (to
convert current prices to constant prices). Worldwide economic activity tends to
be on an upward path and, as
Table 13.1
shows, all the selected economies grew
strongly in the period 2000-2006. In particular, there were big increases in India
and China, although both countries were growing from a relatively low economic
base. To facilitate international comparison it is necessary to take into account the
size of the country. This is achieved by expressing GDP or GNI on a
per capita
basis, by dividing total GDP or GNI by the total population to arrive at an amount
per head (see the dollars per capita column in
Table 13.1)
.
Table 13.1
Macroeconomic statistics for selected economies
GDP
Gross National Income (GNI)
Countries in rank order
Billions of dollars
% real growth rate
Dollars per capita
2010
2010
2000 - 2010
Norway
427
14,646
5,334
2,377
5,721
1,554
87,350
47,340
41,850
38,200
4,270
1,270
1.7
1.8
0.9
1.8
10.8
8.0
United States
Japan
United Kingdom
China
India
Source:
Adapted from World Bank (2012:
Tables 1.1 a
nd
4.1)
The statistics in
Table 13.1
are taken from World Development Indicators, a
comprehensive set of data produced by the World Bank each year. The first table in
the series always addresses 'The Size of the Economy'. The current publication lists
relevant data for most major national economies in alphabetical order. In previous
years, however, this data was presented in rank order according to GNI per capita.
The concept of 'rank order' demonstrates the importance of these figures, as they are
used to create a type of league table, in which (in 2010) Norway, the United States,
and Japan come ahead of the United Kingdom, since the gross national income
(GNI) divided by the population is higher in each of these countries than in the UK.
