Real and Nominal GDP – The Basic Difference

GDP, or Gross Domestic Product is the value of all the goods and services produced in a country. The Nominal Gross Domestic Product measures the value of all the goods and services produced expressed in current prices. On the other hand, Real Gross Domestic Product measures the value of all the goods and services produced expressed in the prices of some base year. An example: Suppose in the year 2000, the economy of a country produced $100 billion worth of goods and services based on year 2000 prices. Since we're using 2000 as a basis year, the nominal and real GDP are the same. In the year 2001, the economy produced $110B worth of goods and services based on year 2001 prices. Those same goods and services are instead valued at $105B if year 2000 prices are used. Then: Year 2000 Nominal GDP = $100B, Real GDP = $100B Year 2001 Nominal GDP = $110B, Real GDP = $105B Nominal GDP Growth Rate = 10% Real GDP Growth Rate = 5% Once again, if inflation is positive, then the Nominal GDP and Nominal GDP Growth Rate will be less than their nominal counterparts. The difference between Nominal GDP and Real GDP is used to measure inflation in a statistic called The GDP Deflator. Pakistan GDP or the Gross Domestic Product of Pakistan decides the growth of Pakistan's economy. In spite of the fact that Pakistan is among the highest populated nations and that much of the citizens do not even earn a decent living, the country is fast improving its economic status. The economy growth of Pakistan is among the top three developing nations in the world, the other two being China and India. The growth percentage of Pakistan GDP was calculated as 8.45 % in 2005. Much of the success of the economy owes it to the telecommunication industry as well as the growing Information Technology sector.

Latest Indicators for Pakistan
GDP (official exchange rate): $124 billion (2006 est.) GDP - per capita (PPP): $2,600 (2006 est.) GDP - real growth rate: 6.6% (2006 est.) GDP (purchasing power parity): $437.5 billion (2006 est.) GDP - composition by sector: agriculture: 22% industry: 26% services: 52% (2006 est.)
The good news about the Pakistan economy development is that the government has been truly successful in bringing down the poverty levels very successfully in the last 6 years. The economy of the country has now reached a steady statistics. The proof of this lies in the fact that even after the 2005 earthquake, the country was strong enough to sustain the loss.

Pakistan GDP - real growth rate
GDP - real growth rate: 6.3% (2007 EST.)

Year GDP-Growth Rate real Rank % change Date of Information 2003 4.50 % 48 FY01/02 est. 2004 5.50 % 45 22.22 % 2003 2005 6.10 % 47 10.91 % 2004 2006 6.60 % 48 8.20 % 2005 2007 6.60 % 59 0.00 % 2006 2008 6.30 % 62 -4.55 % 2007 Definition: This entry gives GDP growth on an annual basis adjusted for inflation and expressed as a percent.

Equivalent Data From the International Monetary Fund
Variable: Gross domestic product, constant prices Note: Annual percentages of constant price GDP are year-on-year changes; the base year is country-specific. Units: Annual percent change

GDP (official exchange rate): $106.3 billion (2007 est.) Definition: This entry gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation's GDP at offical exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year. The measure is simple to compute and gives a precise measure of the value of output. Many economists prefer this measure when gauging the economic power an economy maintains vis-à-vis its neighbors, judging that an exchange rate captures the purchasing power a nation enjoys in the international marketplace. Official exchange rates, however, can be artifically fixed and/or subject to manipulation - resulting in claims of the country having an under- or over-valued currency - and are not necessarily the equivalent of a marketdetermined exchange rate. Moreover, even if the official exchange rate is marketdetermined, market exchange rates are frequently established by a relatively small set of goods and services (the ones the country trades) and may not capture the value of the larger set of goods the country produces. Furthermore, OERconverted GDP is not well suited to comparing domestic GDP over time, since appreciation/depreciation from one year to the next will make the OER GDP value rise/fall regardless of whether home-currency-denominated GDP changed.

Equivalent Data
Variable: Gross domestic product, current prices Note: Values are based upon GDP in national currency and the exchange rate projections provided by country economists for the group of other emerging market and developing countries. Exchanges rates for advanced economies are established in the WEO assumptions for each WEO exercise. Units: U.S. dollars Scale: Billions

Nominal GDP Rate of Pakistan – Estimated for 2008-2014
November 2008 Pakistan 160.152 175.452 192.350 211.351 231.575 254.113 277.392 Base Year

Nominal GDP Rate of Pakistan per Capita Income - Estimated 2008- 2013

2006 Pakistan 1,000 1,048 1,082 1,142 1,211 1,288 Base Year

Pakistan overall GDP Rate of last years (Nominal GDP) 2003 2002 2001 2000 1999 1998 Pakistan 68,815 59,235 58,765 60,933 58,605 62,228

Method of Calculating of GDP in Pakistan
GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current U.S. dollars. Dollar figures for GDP are converted from domestic currencies using single year official exchange rates. For a few countries where the official exchange rate does not reflect the rate effectively applied to actual foreign exchange transactions, an alternative conversion factor is used.

Historical Data 1964-2006 of Pakistan
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 1969 1968 1967 1966 1965 1964 $128,830,200,000.00 $111,298,900,000.00 $97,994,780,000.00 $82,343,220,000.00 $71,479,360,000.00 $71,498,690,000.00 $73,320,820,000.00 $62,973,850,000.00 $62,191,960,000.00 $62,433,340,000.00 $63,320,170,000.00 $60,636,070,000.00 $51,894,800,000.00 $51,478,360,000.00 $48,635,240,000.00 $45,451,960,000.00 $40,010,420,000.00 $40,171,020,000.00 $38,472,740,000.00 $33,351,530,000.00 $31,899,070,000.00 $31,144,920,000.00 $31,151,820,000.00 $28,691,890,000.00 $30,725,970,000.00 $28,100,610,000.00 $23,689,700,000.00 $19,707,980,000.00 $17,820,100,000.00 $15,126,060,000.00 $13,338,490,000.00 $11,340,000,000.00 $8,773,031,000.00 $6,324,884,000.00 $9,309,109,000.00 $10,602,060,000.00 $10,027,090,000.00 $8,632,927,000.00 $8,090,088,000.00 $7,403,822,000.00 $6,466,611,000.00 $5,884,712,000.00 $5,130,515,000.00 #41 #44 #46 #45 #47 #42 #44 #44 #44 #45 #45 #44 #46 #42 #42 #40 #45 #43 #42 #44 #39 #39 #38 #40 #39 #42 #44 #45 #41 #41 #42 #45 #50 #51 #34 #29 #28 #29 #28 #26 #28 #29 #29