Question

In 2015, real GDP was SAR 12,247 billion. In 2018, it was SAR13,206 billion. During the same period, the Saudi population rose from 22.9 million to 25.4 million. a. Calculate real GDP per capita in 2015 and 2018. By what percentage did output per person grow over this period? b. Suppose that real GDP grown by 3% each year from 2015 to 21018, what would real GDP have been in 2018?

Answer 1

a) - Saudi population in 2015 = 22.9 million = 0.0229 billion

real GDP per capita in 2015 = 12247 / 0.0229 = SAR 534803.49 billion

- Saudi population in 2018 = 25.4 million = 0.0254 billion

real GDP per capita in 2018 = 13206 / 0.0254 = SAR 519921.26 billion

output per person grow over this period = (519921.25 - 534803.49) / 534803.49 = -0.02783 = -2.78%

b)  real GDP grown by 3% each year from 2015 to 2018, it means

3% = (GDP (2018) - 12247) / 12247

0.03* 12247 = GDP (2018) - 12247

GDP 2018 = 0.03* 12247 +  12247

GDP 2018 = 12614.41