Gross domestic product

In economics,gross domestic product (GDP) ismeasure ofsize ofeconomy ofparticular territory.

Itdefined astotal valueall goodsservices produced within that territory duringspecified period (most commonly, per year). GDP differs from gross national productexcluding inter-country income transfers,effect attributing toterritoryproduct generated withinrather thanincomes receivedit.

A common equationGDP is:

GDP = consumption + investment + government expenditures + exports - imports

Aggregate expenditurescalculated insimilar way, althoughaggregate expenditures formula does not accountunplanned investment (left over inventory atend ofreporting cycle)is more commonly used by economic theorists.

GDPsdifferent countries may be compared by converting their valuenational currency accordingeither (a) exchange rates prevailing on international currency markets, or (b)purchasing power parity (PPP)each currency relative toselected standard (usuallyUnited States dollar).

The relative rankingcountries may differ dramatically betweentwo approaches, as using official exchange rates can routinely understaterelative effective domestic purchasing power ofaverage producer or consumer withinless-developed economy by 50-60% owing toweaknesslocal currencies on world markets.

Onother hand, comparison based on official exchange rates can offerbetter indication ofcountry's purchasing power oninternational marketgoodsservices.

For more information see measuresnational income.

Listcountries by total GDP, PPP basis

Rank	Country	PPP total	PPP/capita	Population
		(U.S dollars)	(U.S dollars)	(2003 est.)
1.	United StatesAmerica	10.40 trillion	37,600	290,343,000
2.	China (P.R.)	5.70 trillion	4,400	1,287,000,000
3.	Japan	3.55 trillion	28,000	127,215,000
4.	India	2.66 trillion	2,540	1,049,701,000
5.	Germany	2.18 trillion	26,600	82,399,000
6.	France	1.54 trillion	25,700	60,181,000
7.	United Kingdom	1.52 trillion	25,300	60,095,000
8.	Italy	1.44 trillion	25,000	57,998,000
9.	Russia	1.35 trillion	9,300	144,526,000
10.	Brazil	1.34 trillion	7,600	182,032,000
11.	South Korea	931 billion	19,400	48,249,000
12.	Canada	923 billion	29,400	32,207,000
13.	Mexico	900 billion	9,000	104,908,000
14.	Spain	828 billion	20,700	40,218,000
15.	Indonesia	663 billion	3,100	234,894,000
16.	Australia	528 billion	27,000	19,732,000
17.	Turkey	468 billion	7,000	68,110,000
18.	Iran	456 billion	7,000	68,279,000
19.	Netherlands	434 billion	26,900	16,151,000
20.	South Africa	432 billion	10,000	42,769,000

Source: CIA World Factbook: PPP, PPP/Capita, Population

The methodologyderiving accurate PPP comparisons remains under constant review,questions have been raised aswhetherrelative sizeMainland China's GDP may be overstatedsome extent.

See also: GDP deflator, Measuresnational income, Natural gross domestic product