What does it mean?
In: Economics
It means 20% less goods and services were produced to be sold compared to the previous month. Ultimately this is where all the wealth that the country has comes from. Exceptions include debt/spending savings or the Bank of England supplying extra money out of nowhere (quantitative easing)
Imagine the entire UK (your parents, every company operating here and paying taxes here etc.) produce the total amount of 100 pounds a year. GDP falling by 20.4% means that they will produce only 79 pounds and 60 pence this year. Now keep in mind that the amount of money the UK gets to spend comes partly from that amount through income taxes etc. It boils down to everyone having less money than they did before, and as we all know – it’s not good. Companies will have less money so they can’t work on the same scale and will probably have to fire some of it’s employees to cut down on expenses. That results in people not having money (they can’t work to earn it) and the government having to pay them unemployment benefits when the gov. itself doesn’t do great financially. Keep in mind that I very oversimplified everything.
Gross Domestic Product (GPD) is all the goods and services produced in a country in a given period. It is supposed to represent how productive a country is. More stuff made, higher gdp. You are making 20% less stuff, there is 20% less new stuff available.
For perspective:
The UK has about 66 million people and a GDP of 2.85 Trillion or 2850 billion.
Tanzania has 59 million people and a GDP of 58 billion.
Losing 20% of trillions of dollars is…many dollars.
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