what is GDP ? Gross domestic product (GDP) is an important tool for measuring how a country's economy is doing. hat is GDP and how is it worked out? GDP is a measure of all the economic activity of companies, governments and people in a country. In the UK, new GDP figures are published by the Office of National Statistics (ONS) every month. However, quarterly figures - covering three months at a time - are considered more important. Most economists, politicians and businesses like to see GDP rising steadily. That's because it usually means people are spending more, extra jobs are created, more tax is paid and workers get better pay rises. When GDP is falling, it means the economy is shrinking - which can be bad news for businesses and workers. If GDP falls for two quarters in a row, that is known as a recession, which can lead to pay freezes and job losses. How does GDP affect me? If GDP is going up steadily, people pay more in tax because they're earning and spending mor...