The Gross Domestic Product measures the levels of goods and services, which are produced by the sixteen economies. It gives the exact percentage of output for a specific period of time, which is always the output of three months together and so the year is divided in fourth quarters. This reading is released on a quarterly basis by Eurostat.
The GDP reading is calculated based on the following equation:
GDP= C + I + G + (Exports-Imports)
The letter C stands for private consumption, which is a gauge in the levels of goods and services that are consumed by the household sector, it's also a good indicator to understand how the private consumer is behaving. This reading is a vital contributor to the GDP; because it clears the levels of confidence citizens have which will support them to spend more.
The letter I stands for the level of private investments in the economy, this reading also helps in clearing levels of confidence in certain economies, which would encourage private investments.
The letter G stands for the government expenditure, which is also known by the government as spending, it measures the levels of spending taken place by the government. The higher the government spending is the more it will cause expansion, yet this aspect in particular can be explained in a negative way also, the more the government spends means the economy is tumbling, because spending more means that changes in the fiscal policies will be needed leading to an intervention and so.
Exports are a measure of the levels of goods and services that are sold outside of the country.
Imports measure the amount of goods and services that are imported into a certain economy from foreigners.