GDP (Gross Domestic Product)

Gross Domestic Product (GDP) is one of the most important economic indicators used to measure the overall economic performance of a country. It represents the total value of all goods and services produced within a country's borders over a specific period, usually quarterly or annually. GDP is commonly used to gauge the size and health of an economy, with higher GDP figures indicating stronger economic performance.

There are three main approaches to calculating GDP:

1. Production Approach: Summing the value of all goods and services produced in the economy.
2. Income Approach: Adding up all incomes earned by individuals and businesses, including wages, profits, and taxes, minus subsidies.
3. Expenditure Approach: Summing total consumption, investment, government spending, and net exports (exports minus imports).

In the Forex market, GDP is a critical factor influencing currency value. A growing GDP typically strengthens a country’s currency as it signals a robust economy, attracting investment. Conversely, a declining GDP may weaken the currency, as it reflects economic challenges. Forex traders closely monitor GDP releases and forecasts, as they can significantly impact market sentiment and trading decisions.