What is GDP? How it's increase or decrease impacts share market?
What is GDP? GDP (Gross Domestic Product) is the total value of goods and services produced within a country during a specific period, usually a quarter or a year. In simple terms, GDP tells us how fast the economy is growing or shrinking. For example: GDP growth 7% → economy is expanding strongly. GDP growth 3% → economy is growing, but more slowly. GDP growth negative → economy is contracting. How does GDP affect the share market? GDP growth and typical market reaction A simplified illustration of how economic growth can influence corporate earnings and share prices. Market reactions are not automatic; interest rates, inflation, valuations and expectations also matter. 1. GDP increases → usually positive 📈 Higher economic growth can mean: Companies sell more goods/services Corporate profits increase Investment and employment improve Investors become more optimistic This can push share prices upward, particularly sectors such as banks, automobiles, construction, capital goods and con...