GDP measures production in the economy
Gross domestic product measures the value of goods and services produced within the economy over a period. The ABS estimates GDP through the national accounts using several complementary approaches to production, income and expenditure.
GDP is a broad measure of economic activity, but it is not a complete measure of household wellbeing, environmental quality or distribution of income.
Real and nominal GDP
Nominal GDP is measured at current prices, so it can rise because production increases, prices increase or both. Real GDP adjusts for price changes to provide a clearer measure of changes in the volume of economic activity.
Political claims about 'growth' usually refer to real GDP, but the source should still be checked because nominal figures can be much larger during periods of inflation.
Total GDP versus GDP per capita
An economy can grow in total while GDP per person falls if population growth is faster than the growth of output. This is why per-capita measures are often discussed alongside aggregate GDP.
Neither measure is automatically the only correct one. Total GDP matters for the size of the economy, while per-capita GDP adds information about output relative to population.
Quarterly growth and technical recessions
The national accounts are published quarterly. Commentators sometimes use the phrase 'technical recession' for two consecutive quarters of negative real GDP growth, although economic conditions are assessed using a wider range of indicators.
Small quarterly movements can be revised as better data become available, so a preliminary estimate should not be treated as permanently fixed.
How to test a growth claim
Identify whether the claim uses quarterly, annual or year-ended growth, and whether it refers to real GDP, nominal GDP or GDP per capita. Check the comparison period because choosing a different starting point can change the political story dramatically.
ABS national accounts and Treasury forecasts provide the relevant primary data and assumptions for most federal political claims about economic growth.
Primary sources and further reading
We use authoritative Australian institutions as the starting point for this explainer. Follow these links for the underlying rules, official guidance and current details.