Calculation of GDP – Expenditure Approach

Expenditure approach

GDP = Consumer spending on goods and services

       + Business gross fixed investment

       + Change in inventories

       + Government spending on goods and services

       + Government gross fixed investment

       + Exports ? Imports

       + Statistical discrepancy

In theory, the two approaches should provide the same estimate of GDP. However, in practice they differ because of the use of different data sources. The difference is accounted for by a statistical discrepancy.