GDP is often found in the media when it comes to the economies of countries or regions. But what does it mean for ordinary people who solve personal financial problems on a much smaller scale? Why do you need to know anything about GDP at all? We will try to answer these questions in this article.

How does the GDP indicator reflect our reality?

Gross domestic product – this is how GDP stands for – reflects the total value of all goods and services that were produced in the state for the year.

If we analyze the meaning of individual words in the term, it turns out that:

– gross is evaluating all production and services, – domestic is taking into account only what is produced domestically, – a product is any product or service that has its own market price.

A reasonable question arises – how exactly to count all goods and services across the country? How to determine their final cost? In fact, it is not the goods themselves that are produced or the services available that are taken into account, but the facts of making commercial transactions on them.

So, when calculating GDP, economists look at how much money ordinary citizens spent over the year, how much foreigners invested in the country, how much the state invested in economic development, as well as total exports and imports. The sum of all transactions for the listed operations will be the final GDP of the country.

What does the news about GDP growth mean?

In short, GDP growth (usually relative to last year) reflects the development of the economy, and with it the socio-economic opportunities of the country's population. When you hear about an increase in GDP, it means that the volume of economic activity of people, private enterprises, the state and other entities within the country is growing in the country. More products are produced, citizens are increasing their personal spending, the number of companies is growing, and so on.
The more new companies and industries open, the more jobs appear on the market. This also entails an increase in salaries due to increased competition between employers for potential employees.

Also, GDP growth means that the state receives more taxes, which means that more funds will be directed to the social sphere: salaries for doctors and teachers, housing construction, schools, hospitals, etc.

In some cases, excessively high GDP growth can also have negative consequences, for example, lead to a rapid increase in prices for goods and services. However, a more negative scenario is when the volume of GDP is declining. This means that enterprises are closing in the country, there are fewer jobs and salaries are decreasing.

What is the GDP growth rate in Turkmenistan?

Despite the economic problems in the world, due to which the GDP of many countries shows slow growth, and in some cases negative dynamics, the growth of the gross domestic product of Turkmenistan remains stable. Since the beginning of 2022, this indicator has remained at the level of 6.2%.

At the same time, the European Bank for Reconstruction and Development predicts that in 2022 the real GDP growth of Turkmenistan will be at the level of 7%. This indicator will be achieved due to the country's strategy for import substitution and the growth of world prices for energy resources, according to the Bank's specialists.

Eziz OVEZOV
Photo: www.akchabar.kg