Abstract

World GDP, also known as world gross domestic product or GWP – gross world product, calculated on a nominal basis, was estimated at $65.61 trillion in 2007 by the CIA World Factbook. While the US is the largest economy, growth in world GDP of 5.2% was led by China (11.4%), India (9.2%) and Russia (8.1%). It is there expedient for global investors to understand these important economic indicators of national growth prospect. An in-depth study of economists’ expectation of GDP has supported that some countries may not be experiencing economic upswing soon and investors may want to reconsider their investment strategies and re-assess their risk exposure. Therefore, this research report recommends that investors should re-appraise their risks stances in relation to returns expected from the global market. It was also gathered in this report that while the global financial meltdown contributed immensely towards hampering the growth in GDP, national government policies could also slowdown growth. The report concluded that while studying GDP could give a good guide to economy growth prospect, there is no correlation between studying GDP and the capital markets. Global investors should therefore look beyond GDP in arriving at their investments decisions and should not underestimate the potential of the underlying industries and firms.

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