Enter the GDP for the current period and the GDP for a previous period into the calculator to determine the GDP growth rate.
GDP Growth Rate Formula
The following formula is used to calculate a GDP growth rate.
% G = (GDPc – GDPp) / GPDp *100
- Where % G is the percentage of GDP growth
- GDPc is the gross domestic product of the current period
- GDPp is the gross domestic product of the previous period
GDP Growth Rate Definition
A GDP growth rate is defined as the rate of increase in the gross domestic product of a given country over a period to period basis.
Is GDP growth good?
GDP growth is a key indicator that the economy of a country is strong and growing. When GDP increases, the taxes that the country is able to collect also increases, which can then be put back into public services to improve the country. There are cases when GDP growth is not good, for example, when large amounts of inflation are causing the GDP to increase unnaturally.
Can GDP growth rate be negative?
A GDP growth rate can be negative if the GDP of the country or region decreased from the previous period being analyzed. A negative growth rate is almost always a bad sign that an economy is contracting and
Does GDP growth cause inflation?
GDP growth is not a direct cause of inflation, however, an increase in inflation will typically increase the GDP, but does not mean that the economy is healthy.
Why is GDP growth important?
GDP growth is important for the growth of a country as a whole. An increasing GDP means the economic output of the companies in that country are increasing. As the economic output increases, the economic positions of the people in the country also increase, which typically leads to more happiness and security.
GDP Growth Rate Example
How to calculate a GDP growth rate?
- First, determine the current GDP.
Calculate the total GDP for the current year or period.
- Next, determine the previous GDP.
Calculate the previous year or periods GDP.
- Finally, calculate the growth.
Use the equation above to calculate the GDP growth rate.
A GDP growth rate is the rate of increase of gross domestic product period over period.