GDP - Current affairs dictionary

Whether a foreigner or a Korean citizen, regardless of nationality, it is a concept that includes all the production activities in the Korean border.  It is called 'gross domestic product'. It is an index used to analyze the living standards and economic growth rates of most of the countries of the world as well as  Korea. 


Notation in foreign language
Gross Domestic Product (English)

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'Gross domestic product' is a concept that includes all production activities carried out on the Korean border regardless of nationality, whether foreigner or Korean. In other words, GDP is the sum of the market value of the added value or the final product created by all the economic entities such as households, enterprises, and governments in the area of ​​one country participating in the production activities for a certain period. GDP means all income generated in Korea, so the production activities of foreign workers who work in Korea are also included in GDP. GDP is now used as a central indicator of production, including economic growth rates.


In the past, when the market was restricted to Korea, we used the GNP, a concept that represents the gross output of our people, when it represents the economic growth rate regardless of the place. However, since the number of Koreans (especially corporations) has increased overseas, it has become increasingly difficult to accurately calculate external receipts in time and the accuracy of GNP has fallen. On the other hand, in contrast to this, the amount of income generated by foreign companies entering the country can be understood more quickly and accurately, and a large part of the income earned by foreign companies for their participation in production activities in Korea is actually spent in domestic or reinvested do. In other words, not only do foreign companies eat and live here, but also domestic income is invested in Korea.
Also, the rise or fall in the level of employment, that is, the rise and fall in the domestic unemployment rate, is influenced by the domestic production activities of foreign companies, not by the foreign production activities of our corporations.

For these reasons, GDP has become increasingly used in most countries to analyze economic growth. In Korea, too, GDP is used instead of GNP when estimating the target economic growth rate.