PIIE Charts are a collection of economic indicators curated by PIIE, the Institute for International Economics. These charts, forecasts and projections are based on officially recognized sources of data.
Global GDP is a measure of the value of a country’s economy, calculated by adding up all the final goods and services produced in a country. It includes production within the country’s borders as well as imports and excludes net foreign investment and government transfer payments.
As a broad indicator of an economy’s health, GDP is closely watched by economists and policymakers. However, there are a number of limitations to its usefulness. For one, it is difficult to adjust for quality improvements and the addition of new products. Additionally, GDP does not take into account non-market transactions such as those involving bartering or volunteer/unpaid work.
The determinants of GDP vary between advanced economies (AEs) and emerging markets and developing economies (EMDEs). In AEs, changes in COVID-19 deaths and OSI have significant, but varying, effects on GDP. In EMDEs, by contrast, death variations are much smaller and not statistically significant, while exports and OSI have a larger impact.
The right-hand column of Table 4 shows the sectoral distribution of the effects on relative GDP resulting from a unitary increase in world demand. The largest gains are in Electricity and Gas, Water, Chemicals, Metal Products, and Transport Services. The biggest decreases are in Agriculture, Construction and Public Administration. These sectoral decompositions can be used to understand how growth is allocated around the globe and to identify the drivers of relative GDP performance.