Translation: Nominal GDP = Nominal Gross Domestic Product

Nominal gross domestic product (Nominal GDP) is the total value of the final goods and services produced within a country over a specified period, calculated using the prices prevailing during that period, without adjusting for changes in prices or inflation.

Simple definition:
Imagine that a country produces a certain quantity of goods and services over the course of a year. We then calculate the value of this output using the prices in that same year. If prices rise, nominal GDP can increase even if the actual quantity produced does not change.

Note:
An increase in nominal GDP does not necessarily mean that the economy has produced more goods and services; some of the increase may be due to rising prices. Therefore, real GDP is used when measuring output growth while excluding the effects of price changes.

Example:
Suppose a country produced goods and services worth 1,000 billion riyals in 2025, measured at that year’s prices. In 2026, the value of output rose to 1,100 billion riyals. Nominal GDP therefore increased by 100 billion riyals, but this increase may have resulted from higher output, higher prices, or both.

What does this mean for you?

Measuring the monetary value of output: Nominal GDP shows the financial value of economic output at the prices prevailing during the same period.

Tracking the size of the economy: It helps show the total value of economic activity and is used in many economic comparisons and calculations.

Understanding the effects of prices: When nominal GDP rises, it is important to determine whether the increase resulted from higher actual output or changes in price levels.

Comparing it with real GDP: Comparing nominal and real GDP helps provide a clearer picture of economic growth, apart from the effects of inflation.

Frequently asked question: Does an increase in nominal GDP mean the economy has grown?
Answer: Not necessarily. Nominal GDP may rise solely because prices have increased, even if the actual volume of output remains unchanged. Therefore, real GDP is used to measure actual growth in output.