An impaired provision of credit by banks
could have severe spillover to the real
economic activity and inflation.
Deposits and loans are included in GDP.
Bank lending affects corporate ability
to buy capital goods, expand and hire.
A slowdown in bank lending has a
detrimental effect on a country's GDP as
spending is reduced.
Gross Domestic Product (GDP)is the market
or monetary value of total goods and services
produced in a country during a given year.
GDP includes all private (consumer)and
public (government sector spending,including
export values minus import values and
investments.
An increase in GDP represents economic growth
and a decrease in GDP results in a recession.
Any prolonged decrease in GDP due to an
excessive number of business bankruptcies
and protracted unemployment results in a
depression.
The fourth quarter of 2010 GDP was 3.3% and
in first quarter2011 GDP was 1.8%, a decrease
of 1.5% in three months. The first quarter
there was a significant increase in imports
and an increase in overall spending by all
sectors (government,industrial and consumer.
The overall increase in spending may be the
result of increased energy and food prices.
