Imagine that you are the Plant manager of a manufacturing plant that produces widgets (1000 per year), that have a certain price in the market ($100). The annual production is current dollars is $ 100,000.
That indicator gives you an idea of the production at market values. It says nothing about how the employees feel (Are they motivated? Are they well compensated?). It says nothing about the interaction of the plant with the environment (which are the carbon emissions?). You cannot analyze the plant performance with one metric.
Imagine now a country as a huge manufacturing plant. The GDP is an indicator of production at market values. In 2017, the US GDP was around 19 trillion dollars. Usually, to make international comparisons, the GDP per person is used (US: $59,500 in 2017, Niger: $380). Hence, the GDP is an imperfect indicator of production; certain activities are not computed (illegal transactions, work done at home, etc.). It is an economic indicator of standard of living.
THE GDP is not a social indicator. It says nothing about life expectancy, access to water or education levels. In Japan, the life expectancy is 84 years; in Niger, 60 years. The population of countries with very high GDP per capita (Norway, US) have normally better quality of life than countries with very low GDP per person (Chad, Haiti).
The relationship between happiness (well-being) and GDP is not so simple; some countries (Denmark) have an overall happiness level higher than countries that have higher GDP per capita (US).
There have been certain efforts to create a better index, for example the GPI (genuine progress indicator), the Human Development Report (by the United Nations).
In order to make economic comparisons, I recommend the Competitive Rankings of the IMD and the World Economic Forum that take into consideration several sets of variables.
