Economic Indicators

Economic indicators are measures used to assess the performance and health of an economy. The government, investors and Bank Negara Malaysia use these indicators to make policy decisions. Key indicators include GDP, GNP, economic growth, inflation, the unemployment rate and per-capita income.

GDP and GNP

Gross Domestic Product (GDP) is the total market value of all final goods and services produced within the borders of a country in a period (usually a year). Gross National Product (GNP) is GDP plus the net income earned by the country's nationals from abroad. In short, GDP counts by location of production, while GNP counts by the nationality of the owners of the factors of production.

Economic growth, inflation and the CPI

Economic growth is the increase in real GDP from year to year; it shows the economy is expanding. Inflation is a sustained rise in the general price level of goods and services. Inflation is measured using the Consumer Price Index (CPI), an index that tracks the change in the price of a basket of goods and services typically bought by households. When the CPI rises, the purchasing power of the Ringgit falls.

Unemployment and per-capita income

Unemployment occurs when a person who is willing and able to work cannot find a job. The unemployment rate is the percentage of the labour force that is unemployed. A high unemployment rate means the country's labour resources are not fully used, while a low rate points to a healthy economy. Per-capita income is the average income of each person and is often used as an indicator of the standard of living; however, it is only an average, so it does not show how income is actually shared between the rich and the poor. For that reason these indicators should be read together rather than in isolation.