The International Monetary Fund (IMF), in its latest World Economic Outlook report, cut its forecast for India’s gross domestic product (GDP)
growth in financial year 2022-23 (FY23) by 60 basis points (bps) to 6.8
per cent, warning of a long and tough economic winter.

LEARNING WITH TIMES

The IMF, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.
The IMF’s responsibilities: The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
Headquarters: Washington, D.C.
CEO: Ms. Kristalina Georgieva, from Bulgaria

                    
 The IMF works hand-in-hand with the World Bank.
Both are also known as Bretton Woods twins. and although they are two separate entities, their interests are aligned, and they were created together. While the IMF provides only shorter-term loans that are funded by member quotas, the World Bank focuses on long-term economic solutions and the reduction of poverty and is funded by both member contributions and bonds. The IMF is more focused on economic policy solutions, while the World Bank offers assistance in such programs as building necessary public facilities and preventing disease.

GDP, which is the total monetary value of final goods and services — that is, those that are bought by the final user — produced in a country in a given period of time . In other words, it measures the value of total output in the economy by tracking the total demand.

The other is Gross Value Added or GVA. It looks at how much value was added (in money terms) in different productive sectors of the economy. As such, it tracks the total output in the economy by looking at the total supply.

On the face of it, the total output should be the same but every economy has a government, which imposes taxes and also provides subsidies.As such, GDP is “derived” by taking the GVA data and adding the taxes on different products and then subtracting all the subsidies on products. In other words,

GDP = (GVA) + (Taxes earned by the government) — (Subsidies provided by the government)

LEARNING FROM HOME/WITHOUT CLASSES/BASICS

GDP: Gross Domestic Product, a measure of economic activity in a country/ Level of output produced by the country. the final value of the goods and services produced within the geographic boundaries of a country during a specified period of time, normally a year.

                       Gross National Product (GNP) is a measurement of the overall production of persons or corporations native to a country, including those based abroad. GNP excludes domestic production by foreigners.

                        Net National Product (NNP) is the monetary value of finished goods and services produced by a country’s citizens, overseas and domestically, in a given period. It is the equivalent of gross national product (GNP), the total value of a nation’s annual output, minus the amount of GNP required to purchase new goods to maintain existing stock, otherwise known as depreciation.

NNP=  Gross National Product−Depreciation​

For example, if Country A produces $1 trillion worth of goods and $3 trillion worth of services in 2018, and the assets used to produce those goods and services are depreciated by $500 billion, using the formula above, Country A’s NNP is:

NNP​=$1 trillion+$3 trillion−$0.5 trillion=$3.5 trillion​




Difference between current and constant data

Data reported in current (or “nominal”) prices for each year are in the value of the currency for that particular year. For example, current price data shown for 2020 are based on 2020 prices. Other series show data in “constant” or “real” terms. Constant series show the data for each year in the value of a particular base year.

Current series are influenced by the effect of price inflation. Constant series are used to measure the true growth of a series, i.e. adjusting for the effects of price inflation. For example (using year one as the base year), suppose nominal Gross Domestic Product (GDP) rises from 100 billion to 110 billion, and inflation is about 4%. In real prices, the second year GDP would be approximately 106 billion, reflecting its true growth of 6%

A new indicator called GDP deflator is derived by dividing nominal GDP by real GDP. It is a measure of price changes in the economy.