On the other hand, if a country's GDP shows negative growth, it means that the country's economy is in recession and its consumption capacity is reduced. At this time, the central bank may cut interest rates again to stimulate economic growth. Falling interest rates and sluggish economic performance will reduce the attractiveness of the country's currency. Therefore, generally speaking, high economic growth rate will promote the rise of the country's currency exchange rate, while low economic growth rate will cause the decline of the country's currency exchange rate.
Differences in economic growth rates have many effects on exchange rate changes:
First of all, a country's high economic growth rate means an increase in income and domestic demand, which will increase the country's imports and lead to a current account deficit, which will lead to a decline in its currency exchange rate.
Second, if the country's economy is export-oriented, economic growth is to produce more export products, and the growth of exports will make up for the increase in imports and ease the downward pressure on the exchange rate of its currency.
Third, a country's high economic growth rate means a rapid increase in labor productivity and a reduction in costs, thus improving the competitive position of domestic products, helping to increase exports and curb imports; And the high economic growth rate makes the country's currency optimistic in the foreign exchange market, so the country's currency exchange rate will have an upward trend.
Extended data
Source of gross domestic product
In the quarterly GDP accounting, all available and applicable economic statistical survey data are used for GDP accounting. Data sources mainly include two parts:
1. National statistical survey data refers to all kinds of statistical data obtained by the national statistical system, such as statistical survey data of agriculture, forestry, animal husbandry and fishery, industry, construction industry, wholesale and retail industry, accommodation and catering industry, real estate industry, sampling survey data of service industry, population and labor wages, price statistics, etc.
Second, the administrative records of the administrative departments, mainly including the relevant data of the Ministry of Finance, People's Bank of China, State Taxation Administration of The People's Republic of China, China Banking Regulatory Commission, China Securities Regulatory Commission and other administrative departments, such as the local and foreign currency credit receipts and payments of financial institutions of the People's Bank of China and tax information of different industries in State Taxation Administration of The People's Republic of China.
Baidu Encyclopedia-Gross Domestic Product