[AlphaOne]

The question i have is this: How in the name of economical gods everywhere can a country increase its GDP by 300% in about 4-5 years.

Im asking this because the former finance minister over here stated :" the country's GDP has raised in these 4 to 5 years by 300% . From about 40-50 billion euros to about 150 billion euros "

Now i know some country's can have economical booms . With GDP increase of up to 10% even 20% a year compared to the previous year.

But how in the name of god can you increase the GDP 3 fold over such a short period of time.


Its a pure objective question that has left me puzzled. I've even asked my macroeconomics teacher about this and he said im an idiot for even considering such a thing.


He argued that it can not be done unless you build up your HUGE GDP increase by adding money from sales or massive public debt be it from the population or from the companies. This in itself would come back to bite you when you end up with a massive public debt that you have to pay/finance even though the gouvernment doesnt actualy have that debt the country as a whole has that debt and unless you wanna go bankrupt as a country you have to find ways to pay it while at the same time find ways to have economical increase.


Sorry i cant explain more detailed  what he tried to explain but its my bad english and the fact that i did not really understand everithing he said just bits and pieces . (Yeah i know i need to get my head in the books )


So im asking can anyone explain my original question to me since i for one however i look at it can not find the answer.

I can not answer this because the banks have massive profits the public indeed has debt but its a debt that ranges from 3-30 years so its not something short term .

I for one start to believe that the GDP increase is well on paper and thats about it. since however i look at it youll need a yearly economic growth of over 60% to have such a massive increase of the GDP.


That a bunch guys. Sorry if the topic may seem stupid but i figured someone here must understand these stuff much better then me . And since i dont wanna nag my teacher about it (i dont like him at all and has a sort of arrogant tone when he speaks with his students so or so it seems to me ...) !

Also i dont wanna make this a topic about my country only i wanna open a debate about different situations and such .

[portej05]

Where are you?

That's a massive increase. I know nothing about economics, but when you've got an increase in something farfarfar outside the standard something has gotta be wrong.

[Charismatic]

How? Lies, cheating, deception and bribery.

[AlphaOne]

Well i believe something has to be wrong too . However i asked a dude today who is a bit more knoledgebeale and he said that such a thing is possible with massive influx of capital and work order from the outside.

Then i started to think back to a couple of privatisations that happened . i believe a total for the 2006 year was several billion euros. But even so you have to back this up with industrial growth dont you ??

[Herra Tohtori]

Only thing that could possibly cause that massive increase is change on calculations and/or statistical interpretations, or definitions of gross domestic product itself... I don't think there's any way such change could be real.

Except if there's a 300% inflation that is ignored.

One way to "interpret" things like this would be for example as follows: If the difference between the import and export has quadrupled so that the difference is now positive 300% of what it used to be... ie. if import used to be worth 100 million and export used to be 101 million, then the profit for the country is technically 1 million; if now the export increases to 10 million, the profit goes up 300%. Even though the actual increase in the export is only about 3%.

Same effect could be achieved in relative decrease in import, but you get my point.


But no, no way such economical growth can be "real". I would guess it's politic-statistic smoke screen or something...

[AlphaOne]

Agreed Hera ! But i have another question ! IF by some means or interpretations the GDP has had such massive increase and that is a very BIG IF ( i doubght such a thing is real ) i wonder how can they afford the huge expenses gooing on now. Over 10 billion euros spent on infrastructure . Over 15 billion euros to be spent by 2015 in equiping and modernizing the army over 8 billion euros to be spent on further increasing the nuclear powerplant we have and building of another one and these are just  a few of the top of my head.

Could such a increase and such massive expenses be financed sustained by credit ??

Oh yeah and our deficit last year was about 5% GDP (5,6 i believe can remember exactly ) And the actual figure they said was about 30 billion euros give or take since i dont know the actual figure .

Have their been any other cases like this ? Also what are the effects of such a thing ?


Hera seems pretty good with macroeconomics and stuff !

Thanx a bunch Hera !

[Solatar]

Only thing that could possibly cause that massive increase is change on calculations and/or statistical interpretations, or definitions of gross domestic product itself... I don't think there's any way such change could be real.

Except if there's a 300% inflation that is ignored.

One way to "interpret" things like this would be for example as follows: If the difference between the import and export has quadrupled so that the difference is now positive 300% of what it used to be... ie. if import used to be worth 100 million and export used to be 101 million, then the profit for the country is technically 1 million; if now the export increases to 10 million, the profit goes up 300%. Even though the actual increase in the export is only about 3%.

Same effect could be achieved in relative decrease in import, but you get my point.


But no, no way such economical growth can be "real". I would guess it's politic-statistic smoke screen or something...

I agree; it sounds like GDP GROWTH grew by 300%, not actual GDP. That's why statistics are so scary sometimes.

[Bob-san]

1) Rapid inflation
2) Rapid growth in a profitable (even labor-light) industry
3) Relatively increased exporting
4) Population increase
4) A combination of these factors


The general rule is that x/70 is the amount of time it takes for something to double, where x is the percent increase over time. For example, if my GDP grows 1% a month, it'll take 70 months for it to basically double (1.01^70=2.007). You wanted 5 years for 300%, right? That's 25% annual growth. With recent developments and the Western inflation, I think that's attainable. Toss in normal growth with larger demand and some inflation, and you're well on your way. Remember that GDP is not dependent on what is purchased, rather being what is produced. If you made bicycles and produced 365 in one year but only sold 300, your annual production is still 365. (82.2% sold) What has to be realized, though, is that the year following you'll be down 65 units produced. If you do 365 again and sell 430 (365+65), your annual production is still 365. (117.8% produced are sold) That'd be no change at all between the two years, since only 365 were made regardless of how many sold. Now fast forward another year, and say that 430 were produced and subsequently sold the very same year. Those 430 will represent a 17.8% increase in production but sales will remain flat between the two years. That is very oversimplified. In those three years, say your price for each bicycle was $100. If that price increased to $110, your part of the GDP would increase 10%. If the price was $50, your part of the GDP would decrease 50%. It's based on today's value.