Spain Gross Domestic Product (GDP) y/y
Spain Gross Domestic Product (GDP) y/y reflects a change in the market value of all final goods and services associated with the country within the reported quarter, compared to the same quarter of the previous year. This extended method for measuring the economic activity provides the key indicator of Spain's economic health. Quarter-over-quarter percentage change of GDP reflects the growth rate of the entire economy. GDP reflects the production level within the country, regardless of the origin of the company, so the calculation includes income from foreign enterprises operating in Spain, but it does not take into account goods and services that provide income to Spanish citizens abroad.
The GDP calculation is a complex process which can be considered subjective to some extent, as the results may differ depending on the parameters included in the process. Some other variables, such as the shadow economy and seasonal adjustment should also be taken into account.
There are three basic approaches to GDP calculations and the results of all the three types must be nearly the same.
- Expenditure approach: calculation of the sum of all the expenditures of economic entities for purchasing final products.
- Value added approach: taking into account all produced goods and services (goods sold and purchased must be equal).
- Income approach: consists of the sum of three elements, including employee wages, gross operating income and indirect taxes minus subsidies.
Generally GDP is used as an indicator of national economy state and standard of living. Its growth is usually interpreted as the strengthening of economy, while the decline is seen as weakening. GDP growth is primarily connected with an increase of domestic expenditures, during which inflation usually increases. This growth may spur the economy and euro quotes may grow. However, too much GDP growth may be dangerous, since inflationary overheating leads to economy weakening. Most economists today agree that economy can be safe and stable with 2.5% - 3.5% GDP growth per year.
A greater than expected value should be seen as positive for the euro quotes, while lower values are usually seen as negative.
The chart of the entire available history of the "Spain Gross Domestic Product (GDP) y/y" macroeconomic indicator. The dashed line shows the forecast values of the economic indicator for the specified dates.
A significant deviation of a real value from a forecast one may cause a short-term strengthening or weakening of a national currency in the Forex market. The threshold values of the indicators signaling the approach of the critical state of the national (local) economy occupy a special place.
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