We analysts keep doing a number of estimations based on
country’s GDP. Most of the variables are best remembered and
analysed as % of GDP- investment, savings, market
capitalization, exports, imports etc etc. The growth rates in
GDP and its components are one of the most important variables
looked upon by analysts. So, the question is how do we compute
GDP? CSO provides an explanation (you need to register, it is
free). As per National Income Accounting there are 3 ways to
compute GDP: - Product wise: Calculating the total production -
Income wise: Calculating the total incomes received by factors
of production – labour & capital - Expenditure wise: Calculating
the total expenditure of all the entities. In a way all the
three are part of a cycle…You begin production by using factors
(labour and capital) and then you pay them incomes which they
eventually spend purchasing items of their need. So, which ever
way you take it, each of the estimates, should provide you the
same GDP. But all these calculations have