GDP measures the total value of everything a country produces over a given period. The growth rate — how much bigger or smaller the economy got compared to the previous quarter or year — is what markets actually trade on, far more than the absolute size figure.
For currencies, GDP works alongside inflation rather than against it directly: a central bank deciding how aggressively to fight inflation has to weigh how much room the economy has to absorb higher rates. Strong growth gives more room to hike; weak growth narrows it, even if inflation is still running hot.
It's a genuinely unusual and telling combination when a central bank raises rates in the same announcement where it cuts its own growth forecast. That pairing signals real conviction that the inflation risk outweighs the near-term cost to growth — worth paying more attention to than a hike delivered alongside an upgraded growth outlook.