Economy Class

A Layman's Guide to Key Economic Terms

- 

Every quarterly or yearly, when we read government media releases talking about GDP growth rates, inflation, employment figures, or current account balances, the news can often sound like a blur of technical jargon. While most of us have a general idea of what these figures are about, we may not necessarily understand the meaning of these terms. But these economic statistics are vital. They tell the story of how a country is performing, whether people are getting wealthier, whether life is becoming more expensive, and whether the government's policies are succeeding or failing. The terms may sound technical, but understanding them does not require a degree in economics. All it takes is a little patience and a few good examples. In this article, we will try to explain some key economic terms and statistics more clearly, using Singapore as the context.

GROSS DOMESTIC PRODUCT (GDP):

The Size of the Economy

The most commonly quoted economic number we see is the Gross Domestic Product, or GDP. GDP measures the total value of all goods and services produced in a country within a given time period, usually a year or a quarter. Think of it as the sum total of all economic activity - from someone buying a bowl of laksa at a hawker centre to major exports of electronics.