How does GDP growth work?

[Chinese Owned Lithium Mine]

Alright, so I've been playing the game for the past few nights now as the USA, and I started to figure out how to play the game. But, there's stuff i don't get at all:

How in the world does GDP growth work? I know interest rate plays a role, but by the time 2040 comes around, is it impossible to raise your GDP? I noticed Japan went from $85,000 per capita to $35,000 by the year 2030, which doesn't make sense.

Isn't it possible to raise your GDP per capita to like $1,000,000? I saw something about a guy playing Iceland and getting it that high, no idea how he did it. I've seen a million different guides about how to manage your economy, but I haven't really seen anything clear and concise about how to get your GDP growth rate to stay really high throughout the entire game. I'm talking #1 growth rate spot with a US GDP of like $30 trillion or something like that within 20 years.

Anyways, I know this all probably sounds confusing, but I would appreciate any help I get from anyone.

[gotaa]

GDP is the summary of all the value produced (resource production) in your country.
Per capita income is GDP divided by population.

You raise the GDP of your country by raising resource production. There are two ways to do this;
1. Fulfill the domestic (internal) demand in your country with domestic production.
2. Export resources.

The first method is straightforward; lets say your country consumes 10 billion worth of food, but only 1 billion is produced in the home country, raise the production so that it is equal to the value consumed. This is called consumption-led GDP growth, and is the staple method for most developed countries.

The second method requires your country to already be supplying the domestic demand with all the resources that it needs. The domestic production is 10 billion, the demand is also 10 billion. The only way to raise domestic production then is to sell additional resources to other countries, exports. This is export-led growth akin to how China grows its GDP in real life.

The second method is risky however in that it puts your country's GDP at the mercy of the global market, thus if a ceiling is reached in the global demand; the GDP growth in your country will stagnate, if the demand begins to lower your GDP (and per capita) is likely to decline.

There are two factors in calculating domestic consumption in your country;
1. Population.
2. Poverty.

Population is the primary factor when the game calculates consumption. Thus the higher it is, the better.

Poverty acts like a multiplicative(?) on consumption. So if the poverty is 50% your country consumes as if it has a 20 billion population, when its actually 40 billion. If the poverty is 100% the country consumes as if there's 0 people (should never happen in-game, this is just for demonstrative purposes).

In short; increase the size of your country's population, lower the poverty (lowers on its own if you're playing even sub-optimally, no way to make it lower faster).

Most probable cause for the Japanese decline in per capita as you described it; is because they were sitting on a huge export surplus, and either global demand declined, or another larger and stronger country started to 'steal' their exports.

Theoretically the per capita income can go well beyond the 1 million mark, the only real ceiling is the limit for whatever data type the country data in question uses. In the case of per capita I believe it is stored as floating point values, in which case the limit is 3.40282347e+38F. A high per capita income is usually easier to achieve as a low population country, as the global demand can potentially be higher than the entire home country's GDP.

I hope this answers your question about GDP growth. If you want to know anything else let me know!

[Chinese Owned Lithium Mine]

Wow! Thanks so much for the fantastic information! That's everything I asked for and more. Anyways, thank you!

[Dutchgamer1982]

the basic unmodded game is capped at a maximum GDP of 30000 per capita.
your national GDP = gdp per capita x number of people.

yes earlier poster is correct that GDP per capita = total production of goods / number of people.

your own people will never ever consume more than 30000 worth of goods though (a mistake in the games programming)
so to exceed this number you will have to export goods to other nations having shortage.

-the later in the game the more nations will grow towards being self-sufficient, reducing the global demand for your exported goods. and there is only so much demand meaning a small very productive nation can reach insanely high GDP per capita... a larger one less so.

first theire is your own domestic need... you will want local production to match it.
if the number is red you have a shortage and need to import, if green you have a surplus and want export.

-> if surplus not finding an exporting nation excists your national production of that good will drop, lowering your gdp in the process.

a shortage of a good, can be handled better... no direct GDP effects, but if demand is not met.. demand will drop and that WILL have effects.

But not all of them are as important..

**cereals is related to feeding your population.. to drop that demand means people dying, giving you less population demanding less things... overal...
->
this is best set on state controlled, most AI nations will put money in this to meet national demand so not a good industry to focus your export on.

*electricity, drives the demand for apliances and machines.. to little of this and those other industries will not grow either.

*fossil drives the production of all the half-products plastics, to medicines..
(and those limit cars, to healthcare)

paper, influences juridic, metal influences construction, etc..

so shortatages higher up the chain influence things lower in the chain.

finally things like education and infrastructure.. in your budget... service professions need educated workers.. and infrastructure to work.. the demand of those will grow over time to the amount you invest.. once your local demand has been met.. keeping it slighly in the green to have growth keep up with population growth will suffice.. no need to overinvest in them.. a lower setting will just take more time for local service industries to max out demand.

----

one last hint towards exporting...
-the trade ban policy bans any exports from the victem of such a policy
-the common market policy is a good one if you are exporting... it means anybody buying inside that common market... will buy your identical surpluss before anybody ouside that common market.. hence having that common market with strong importers is highly favorable.

and finally :
-a state run sector grows production at 50% the rate of a publicly run one without tax.
-a private sector with a tax at 50% will have no growth, above 50% will decrease, and below 50 will increase... this decrease is the sum of sector + global tax rate
- a state sector can be set to "meet demand" meaning imports will be made if anybody is selling to make up the difference at great cost to your treasury
-a state sector earns the full profit for any surpluss sold... to your treasury.. but nothing over domestic consumption... a private sector keeps it's export profits, but yields it's tax percentage over all sells, import and export alike.
-a state sector with meet demand turned off, will just leave the shortage be and suffer the consequences
-a private sector will try to import goods without it costing you anything you even get the tax revenue on any of these imports (the lower taxrate the higher the percentage of shortage will be imported).. however any imports made this way will be reduced from your total good production lowering effective GDP .

[Dutchgamer1982]

so a large late game empire.. with a GDP per capita near that 30000 wants usually to privatise most if not all industries...
with a large population the gains of even a small trade tax on the domestic consumption outstrips the proportionally lower exports.. and even if you wanted to import the missing goods.. owning the largest chunk of the global population who is going to meet your demand? you'd better off with the growth bonus from private.

early game on a small nation or even an island nation... you do want to go goverment.. I once ran kirbathi with over 1 million GDP per capita... that massive export you absolutely want to profit over as an island... just be sure to be selective on what sectors you do want to put import on...

[Chinese Owned Lithium Mine]

Thanks so much, everyone! I really appreciate all the help. Now I can actually figure out what to do now. Anyways, thanks again!

[Chinese Owned Lithium Mine]

Dutchgamer1982 a écrit :

so a large late game empire.. with a GDP per capita near that 30000 wants usually to privatise most if not all industries...
with a large population the gains of even a small trade tax on the domestic consumption outstrips the proportionally lower exports.. and even if you wanted to import the missing goods.. owning the largest chunk of the global population who is going to meet your demand? you'd better off with the growth bonus from private.

early game on a small nation or even an island nation... you do want to go goverment.. I once ran kirbathi with over 1 million GDP per capita... that massive export you absolutely want to profit over as an island... just be sure to be selective on what sectors you do want to put import on...

Speaking of which, how the hell can I raise resources past 100%? i was playing as France, and even though my budget sliders were all at the max, I still wasn't getting past 97%. Meanwhile, the Canada player was getting past 200, 300, and 400% in resources. Side-note, the U.K player jumped from roughly $4 trillion in GDP to $20 trillion almost overnight. Is there a reason for these?

[gotaa]

Godzilla a écrit :

Dutchgamer1982 a écrit :

so a large late game empire.. with a GDP per capita near that 30000 wants usually to privatise most if not all industries...
with a large population the gains of even a small trade tax on the domestic consumption outstrips the proportionally lower exports.. and even if you wanted to import the missing goods.. owning the largest chunk of the global population who is going to meet your demand? you'd better off with the growth bonus from private.

early game on a small nation or even an island nation... you do want to go goverment.. I once ran kirbathi with over 1 million GDP per capita... that massive export you absolutely want to profit over as an island... just be sure to be selective on what sectors you do want to put import on...

Speaking of which, how the hell can I raise resources past 100%? i was playing as France, and even though my budget sliders were all at the max, I still wasn't getting past 97%. Meanwhile, the Canada player was getting past 200, 300, and 400% in resources. Side-note, the U.K player jumped from roughly $4 trillion in GDP to $20 trillion almost overnight. Is there a reason for these?

Anyone is free to correct me on this since I'm taking this from the official manual and that has in my experience been inaccurate from time to time. I will of course derive some of this information from personal knowledge.

The resource bar indicates your resource ratio. A percentage of 100% means that the ratio is 1:1 and your country is fully capable of producing all of its needs (consumption) domestically. A percentage of 50% 0.5:1 meaning your domestic production is half of your consumption. I am not sure if imports change the percentage, the manual says yes though.

So if the resources percentage is 97% that indicates that you're unable to meet your country's consumption with your own production (probably in food, energy, or raw materials).

If the resources is above 100% that means your production is exceeding your country's total value consumed domestically. A percentage of 200% indicates a ratio of 2:1, a ratio above 1:1 is moreover denoted with a '+' sign.

Higher than 100% resources (1:1) I think you get 1 '+' sign on the resources bar.
With 200% resources (2:1) you get 2 '+' signs (++).
With 300% resources (3:1) you get 3 '+' signs (+++).
With 400% or higher (4:1) you get 4 '+' signs (++++).

Achieving anything but 1:1 or slightly above 100% with a high population country can be tricky since value consumed is calculated based on population (- (minus) poverty) and the value required to exceed domestic consumption values can be difficult if there isn't enough global demand for goods.

A small country with a tiny population will for sure have an easier time reaching a ratio higher than 1:1. Think Luxembourg, Andorra, San Marino, Holy See, etc, for example.

I hope this answers your question!

[Chinese Owned Lithium Mine]

Thanks so much! That really helps out a lot.

[gotaa]

Godzilla a écrit :

Thanks so much! That really helps out a lot.

No problem!

I forgot to add that the Canada player in your game was likely investing heavily into primary goods such as food, raw materials, energy. Since those items in particular grow very slowly in SP2 and global demand is relatively stable in those sectors (compared to industrial materials, finished goods and services). Thus enabling him to maintain a high production to consumption ratio, since he was able to sell all of his excess production to the global market.

[Chinese Owned Lithium Mine]

Ah, that makes sense. he never told me why, so your answer makes a lot of sense. Also, what about the U.K thing?

[gotaa]

Godzilla a écrit :

Ah, that makes sense. he never told me why, so your answer makes a lot of sense. Also, what about the U.K thing?

Jumping from 4 trillion to 20 trillion 'overnight' (which I am not sure what you mean by) means that his economy gained 16 trillion worth of resource production. Since I don't know the details I can't say exactly what happened. But unless he had trillions of dollars in savings and there was trillions worth of global demand to support those kinds of exports (I assume he started to export a lot after the boost), that kind of increase is certainly impressive assuming it was gained over a short period of time.

If you have screenshots that could be useful in determining what he did.

[Chinese Owned Lithium Mine]

I wish I did have screenshots. One moment he had 4 trillion in GDP, the other he had $20 trillion. Maybe I'm just seeing things, but I'm glad you were able to provide an answer! It makes a lot more sense than the "wizard magic" I had seen. Anyways, thanks so much!