the decrease in the value of a nation's capital stock over time; GDP accounts for investment in new capital but does not subtract the lost value of depreciated capital. Because of this, GDP may overstate the amount of economic activity in nations with rapidly depreciating capital stocks.

How can GDP be misleading?

The GDP measures market output: the monetary value of all the goods and services produced in an economy during a given period, usually a year. ... It does not even measure crucial aspects of the economy such as its sustainability: whether or not it is headed for a crash.

Does GDP overstate national output?

For instance, GDP does not take into account profits earned in a nation by overseas companies that are remitted back to foreign investors. This can overstate a country's actual economic output.