Gross Domestic Product Per Capita (1998-2014) |

As we have discussed in an another entry, Gross Domestic Product is the name economists give to the aggregated market value of all the final goods and services a country produces within its borders within a calendar year. Economists also differentiate between nominal and real GDP. While nominal GDP presents the aggregate monetary value of all the final goods and services produced in a country in a given year using the current prices of those commodities in that year, real GDP is calculated by using the prices of an index year (in this case, 1998) and generally used to compare the performance of an economy across different years (all indexed to the same year).
In this entry, we will focus on per capita Gross Domestic Product because in tracking the economic growth performance of an economy, we would like to take into account the changes in the size of its population. An economy’s GDP may be growing rapidly, but if the population of that economy is also growing in rapid rate, we may be mislead in assessing the growth performance of that economy. For this reason, economists calculate per capita GDP by dividing the GDP to the population number. Needless to say, GDP per capita is an average value and given the actual distribution of income in a country it may say very little about the standard of living of the majority of people live in that country.

In Table 1, you can track and compare the nominal and the real GDP per capita of Turkey. While the nominal GDP grows at a very fast rate (given the price inflation), real GDP (indexed to 1998 prices) displays a rather slow rate of growth.

If we focus only to changes in the real GDP per capita, we can observe the ups and downs of the economy more clearly. For instance, in 2007, real GDP per capita reaches 1442 TL (in 1998 prices). But then in 2009, due to the 2008 Crash and the subsequent global crisis, it dropped to 1346 TL. In 2010, the economy gradually recovers and the real GDP per capita reaches 1640 TL in 2014.