“Official data showed the UK economy contracted 1.5 per cent in the last three months of 2008, the biggest quarterly slump in 28 years.”
Hi, anybody knows how to look at that 1,5 - I mean what it actually stands to indicate - does it mean that the output of the economy was 1,5% lower in q4 than in q3? Or is it an annualized rate of contraction of the economy? I hope my question is clear enough.
Thanks.
The -1.5% is the QoQ number (quarter over quarter using a 4 quarter average). The YoY number was -1.8% (forecast -1.4% using a 4 quarter average). Just for future refernece, the headline number for GDP is an annualized percentage growth rate.
Basic GDP calculation:
GDP = Private Consumption + Private Investment + Government Expenditure + (Exports of goods and services - Imports of goods and services).
One more thing… there are 3 types of GDP:
Current GDP: GDP expressed in the current prices of the period being measured.
Nominal GDP: Growth is GDP growth in nominal prices and it is unadjusted for price changes.
Real GDP: Growth is GDP growth adjusted for price changes.
Hope this helps…