Why is the total gross regional domestic product (by province) lower than the total gross...


Why is the total gross regional domestic product (by province) lower than the total gross domestic product (by industrial origin) in Indonesian stats?

Regional Domestic Product:

It is an economic tool to measure the market value of finished products and services produced in a given region or a subdivision of a country. It is the most closer aspect of national income accounting to analyze regional economic activity.

Answer and Explanation:

A conceptual introduction of gross national products of Indonesian states:

The value of the gross regional product is equivalent to the value of GDP, as it is also concerned about the money value of final goods and services. It can be measured by the three famous approaches:

  • The production approach.
  • The final expenditure approach.
  • The Income approach.

According to the statistics,

The value of GRP for a province is a sum of the GRP nominal of all industries belonging to the same province at its current prices.

The data reveals that the value of GRP nominal in IDR equals to Rp 14,837 trillion (including of 34 regions).

The value of the total gross domestic product by industrial origin Indonesian States equals to $3,494 trillion.

Why there is a difference?

The economy of Indonesia is a member of G20 and classified as a newly industrialized country. The analysis of gross regional product for a given economy is the most comprehensive way to measure national economic activity.

Learn more about this topic:

Gross Domestic Product: Definition and Components

from Economics 102: Macroeconomics

Chapter 4 / Lesson 3

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