Gross Domestic Product (GDP) — Analysis • Tanushree Nepal

Introduction

Gross Domestic Product (GDP) measures the market value for all products and services within a country's borders. GDP Growth Rate is the percentage increase in GDP from quarter to quarter. To avoid double counting, GDP includes only the final product value; intermediate goods like shoelaces in a shoe are not counted.

Identity: GDP = Consumption + Investment + Government Spending + (Exports – Imports)

Objectives

Compare GDP growth between developed (USA, China, Kuwait, etc.) and developing nations (Nepal, Pakistan, Bangladesh, etc.).
Quantify how financial/economic indicators correlate with GDP.

Algorithm Used — Linear Regression

Supervised ML algorithm modeling a linear relationship between a dependent variable (GDP) and multiple indicators (imports, revenue, taxes, net exports, etc.).
Chosen for interpretability and to estimate strength of each indicator’s association with GDP.

Methodology

Data collection
Cleaning
Preprocessing
Visualization
Model training & testing (Linear Regression)

Data Source & Cleaning

World Bank datasets (1997–2021) across South Asia, North America, and MENA; ~32 countries. Indicators split by type (currency / percentage / number). NA values replaced with 0 per documented reasons in metadata rather than mean imputation across countries.

Visualization & Findings

Nepal vs China — Total GDP Over Time

Total GDP of Nepal and China over time — Fig 1: Nepal’s GDP stalls around the 2015 earthquake, resumes growth, then dips in 2020; China continues growing.

Exports of Goods & Services

Correlation of exports and GDP growth — Fig 2: Export growth correlates strongly with GDP growth.

Exports over time: Nepal vs China — Fig 3: China’s exports steadily increase; Nepal’s exports vary and dip post-2015.

GDP Per Capita Over Time

GDP per capita trends — Fig 4: Nepal’s GDP per capita rises overall, with a decline in 2020 then recovery in 2021.

Total Reserves (incl. gold)

Gross National Income (GNI)

GNI trend — Fig 6: GNI dips in 2020 due to lockdowns reducing domestic value-added.

Predictive Modeling

Data split 70/30 (train/test). Linear regression on the currency indicators achieved an R² ≈ 0.99 for this dataset, suggesting a very strong linear fit.

R-squared on currency indicators — Fig 7: High R² on the currency indicators model.

Conclusion

GDP is strongly affected by trade and financial indicators and by country-specific shocks. Nepal shows sensitivity around the 2015 earthquake and the 2020 pandemic; export strength and reserve policies materially influence outcomes.

References

World Bank indicators (Population, Reserves, etc.)
Migration Data Portal (international migrant stocks)
2005 Nepal coup d’état — background context

Gross Domestic Product (GDP) Analysis