GDP growth

GDP, gross domestic product, is the total value of everything a country's economy produces in a given period. GDP growth measures how much that output is expanding or shrinking, and is one of the most widely watched gauges of how an entire economy is doing.

In a valuation model, long-run GDP growth is often used as an anchor for a company's long-term growth rate, the slow, steady rate assumed forever once a forecast's explicit years end. The reasoning: no single company can outgrow the broader economy forever, since it would eventually have to become the entire economy, so a rate somewhere near long-run GDP growth, often 2-3% in a developed economy, is a reasonably conservative ceiling.