The Gross Domestic Product (GDP) of a country is the sum of the market value of all goods and services produced in the given country in a certain period of time, usually 1 year. it provides an idea of how the country is doing compared to others and compared to itself in previous years.

There are other variables associated to it:

• GDP per capita. It is the ratio between a country's GDP and the population number of the same country. It gives you an idea of the productivity of the people and it gives you a tool to compare GDP's of countries with very different population numbers.

• GDP Growth Rate. This is the rate of change of the GDP with respect to the previous year.

• Real GDP. This is the GDP of a country minus the inflation rate of the country. It is a realistic way of comparing the evolution of a country's GDP over time. Usually, a base year is chosen for comparison purposes. Real GDP Growth Rate combines the previous concept and this one

• GDP Purchasing Power Parity (PPP). It is a tool that allows us to compare 2 countries in which the dollar has different purchasing power.

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.

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