The words recession and GDP have become common parts of our lexicon. This is understandable in view of the fact that the country just experienced it’s first major recession since 1986.

Everywhere you go, from BRT buses to beer joints; from boardrooms to Aso rock villa, you cannot escape the inevitable discussions about GDP, recession and the worsening quality of life of the Nigerian people.

But the question is: do you really understand what these terms mean and the relationship between them?

In this article, we will be elucidating on these terms and their inter-relationship.

GROSS DOMESTIC PRODUCT (GDP)
GDP is the total value of everything produced by all the people and companies in a country. It is one of the primary indicators used to gauge the health of a country’s economy.

GDP can be measured in three ways:

Output measure: This is the value of the goods and services produced by all sectors of the economy; agriculture, manufacturing, energy, construction, the service sector and government

Expenditure measure: This is the value of the goods and services purchased by households and by the government, investment in machinery and buildings. It also includes the value of exports minus imports

Income measure: The value of the income generated mostly in terms of profits and wages.

Whatever approach is used, the number should be the same.

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