Growth Rate
Plain definition
The growth rate is the percentage change in an economic variable — most commonly real GDP — from one period to the next. It is calculated as ((value this period - value last period) / value last period) x 100, and is reported quarterly (annualized) or annually.
In economics
Growth rates let economists compare performance across time and countries regardless of size. Central banks, the IMF, and markets watch GDP growth rates as the headline score of economic health: positive rates mean expansion, negative ones signal contraction. Policymakers also track per-capita growth rates, since population growth can inflate headline GDP figures without raising living standards.
Example
Real GDP was 18.45 trillion in 2025. The growth rate is (18.45 - 18.0) / 18.0 x 100 = 2.5%. If the population also grew 1%, real GDP per capita grew roughly 1.5% — the figure closest to the change in the average person's material well-being.
A growth rate is not the same as the level of GDP. A poor country can post 8% growth while adding far less absolute output than a rich country growing at 2%. Growth rates also compound: steady 3% growth doubles an economy in about 23 years, so small persistent differences in rates produce enormous gaps over time.