The growth rate is a mathematical calculation that is obtained from the difference between two values over time, taking as a reference the percentage of the first value. This indicator can be applied to different areas, such as business, demographic or economic, so that we can find out the percentage of growth of any assumption in a given period of time.
But what exactly is the rate of economic growth? Next, we teach you to calculate the economic growth rate of a country and we show you the main factors that determine the economic development of a state.
What factors determine the rate of economic growth of a country?
Generally associated with certain indicators typical of a country's economy, such as the production and export of goods and services, investment and savings, the evolution of the balance of trade, government policies or per capita income, the main indicator to express the rate of economic growth of a country is the variation in percentage of the Gross Domestic Product (GDP) real. Broadly speaking, this rate refers to the increase in economic indicators and the improvement in the population's living standards as a consequence of this growth.
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In this line, the economic growth of a country is a variable that increases or decreases depending on the GDP: if the GDP grows at a higher rate than the population growth, we will be facing an increase in the standard of living and a notable growth of the country's economy; if, on the contrary, the population grows faster than the GDP, the standard of living will be decreasing.
Other key factors in the economic growth of a country are: investment in capital, very important for workers to carry out their productive work in better working conditions and with more innovative tools; education, or what is the same, investment in human capital to increase production; and technology, which makes it possible to facilitate the evolution of work models, with more constant and efficient means of production, tools and research work.