International Standards

While each national government measures and reports its own GDP, there is an international standard for measuring GDP. Created in 1968 and updated in 1993, the standard is published in the book System of National Accounts, or SNA93. SNA93 was prepared by members of the International Monetary Fund (IMF), the European Union (EU), the Organization for Economic Co-operation and Development, the United Nations and the World Bank. SNA93 provides rules, regulations, and procedures for the measurement of national accounts. The standards are designed to be flexible, to allow for differences in local statistical needs and conditions.

Standard of Living

While GDP is widely used by economists to gauge the health of an economy of a country or region, when used to understand the standard of living in that region, there are widespread disagreements about the accuracy of its real life indications.

GDP per capita is often used as an indicator of the standard of living in an economy; it is understood that in most instances, the population in that region benefits from increased economic production. Since it is measured quarterly, it presents an accurate pulse of the people and the domestic economic activity. As a multitude of countries utilize a standard rating system and participate in their GDP measurement, it allows for some standard of living comparisons between countries. Over a span of time, it provides a consistent reading of plus or minus indicators from each country.
Using the GDP as an actual standard of living indicator can be flawed if, for instance, a country’s exports are significantly high and their imports are low. As a result, the population does not participate in benefits as little or no goods are available for consumption and the standard of living is greatly affected.

Real Growth Rate by Country

Country	Rate
China:	10.7 %
India:	9.2 %
United Arab Emirates:	8.9 %
Russia:	6.7 %
South Africa:	5 %
Korea, South:	4.8 %
Iran:	4.3 %
United States:	3.2 %
United Kingdom:	2.8 %
Canada:	2.7 %
Germany:	2.7 %
Saudi Arabia:	2.4 %
Japan:	2.2 %
France:	2.1 %
Korea, North:	1.8 %

Others point to problematic measurement issues including the GDP-standard of living measurement not taking into consideration disparity in incomes, volunteer work, and subsidized companies’ activity or sustainability of indicated growth.

U.S. Department of Commerce: Bureau of Economic Analysis

The most recent U.S. Department of Commerce Bureau of Economic Analysis report indicated that real gross domestic product increased at an annual rate of 2.8% in the second quarter of 2008– that is, from the first quarter to the second quarter. In the first quarter, real GDP increased 0.9%.

The increase in real GDP in the second quarter primarily reflected positive contributions from exports, personal consumption expenditures (PCE), nonresidential structures, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, residential fixed investment, and equipment and software. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP growth in the second quarter primarily reflected a larger decrease in imports than in the first quarter, an acceleration in exports, a smaller decrease in residential fixed investment, an acceleration in nonresidential structures, an upturn in state and local government spending, and an acceleration
in PCE that were partly offset by larger decreases in inventory investment and in equipment and software.