The Problem with Economic Yardsticks Governments Flaunt

July 31, 2025

Every now and then, a government announces that the country’s economy is doing well. You’ll hear that GDP has gone up. Or that the per capita income has improved. Or that some index shows we’re climbing the global rankings. It sounds impressive. It’s meant to. But what do these numbers really tell us about how people are living?

Start with GDP—Gross Domestic Product. It’s the total value of all goods and services produced in a country in a year. A bigger GDP means more economic activity. But it doesn’t show who is benefiting from that activity. If a few companies are doing extremely well, GDP can rise even if millions of people are struggling to make ends meet. A big jump in stock markets or luxury sales can lift GDP, but it doesn’t change the price of onions, or make medicines cheaper, or help someone find work.

Then there’s per capita income, the average income per person. Divide the total national income by the number of people. But again, that’s just a number. It doesn’t reflect how that money is distributed. One person earning crores can pull up the average, while thousands earning very little still remain invisible in that figure.

To understand this, think of a dinner table. If five people are eating plain rice, and one person is having a lavish feast, the average looks better than what most are actually eating.

Economic growth numbers also don’t tell you if the new jobs are stable or insecure. A rise in employment doesn’t mean people are earning enough to live with dignity. And a spike in production doesn’t mean workers have proper protections or healthcare.

Governments often use these big-picture numbers to claim success. The graphs are going up, so the economy must be fine. But they don’t tell you whether school fees have become unaffordable. Or if gig workers are earning less for more hours. Or whether someone’s small shop is making enough to survive inflation.

It’s not that GDP or other indicators are meaningless. They’re useful for measuring overall activity. But they can never be the full picture. If growth is not inclusive, it doesn’t reach the people who need it most. If development is happening without better access to health, education or clean water, it’s not really improving lives.

Look at rural areas where official poverty numbers may be falling, but hunger and malnutrition are still widespread. Or urban neighbourhoods where incomes have technically risen, but rent and fuel costs are eating into most of it. The problem isn’t with data itself—it’s with how that data is used to create a sense that things are fine, even when they aren’t.

That’s why it’s important to stay curious when someone points to economic rankings or indexes as proof of success. Ask what’s behind the number. Who is doing better? Who is being left out? What does this figure hide?

There’s also the question of what gets counted. Informal workers, women doing unpaid care work, or people in temporary jobs often don’t show up in these figures. Their struggles remain hidden in what looks like progress.

When governments want to look good, they highlight the numbers that flatter them. But that shouldn’t stop us from asking the harder questions. Are people eating better? Is housing more secure? Are young people able to find meaningful work? Are families less worried about healthcare costs?

These are the questions that reflect the real economy. So if we want a fuller picture, we need to consider other markers such as unemployment, malnutrition, access to healthcare, poverty rates, inequality, education quality, and cost of living.

At the end of the day, the purpose of an economy is to support human life. It’s to make people’s lives better, safer and more secure. Numbers should not become a shield to avoid that conversation.

And that’s where we have to look closer, and ask better questions.

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