GDP Growth Rate Calculator
Calculate the percentage change in a country's Gross Domestic Product (GDP) between two periods.
Result:
Understanding GDP Growth Rate
Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. It serves as a broad measure of a nation's overall domestic production.
The GDP growth rate is a key indicator of economic performance. It measures the percentage change in a country's GDP from one period to another (e.g., quarter-over-quarter or year-over-year). A positive GDP growth rate signifies economic expansion, while a negative rate indicates a contraction or recession.
Formula:
The formula to calculate GDP growth rate is:
GDP Growth Rate = [ (Current Period GDP - Previous Period GDP) / Previous Period GDP ] * 100
Where:
- Current Period GDP: The GDP value for the most recent period being analyzed.
- Previous Period GDP: The GDP value for the period immediately preceding the current period.
Example:
Let's say a country's GDP was 19.5 trillion currency units in the previous year, and in the current year, it has grown to 20 trillion currency units.
- Previous Period GDP = 19,500,000,000,000
- Current Period GDP = 20,000,000,000,000
Using the formula:
GDP Growth Rate = [ (20,000,000,000,000 – 19,500,000,000,000) / 19,500,000,000,000 ] * 100
GDP Growth Rate = [ 500,000,000,000 / 19,500,000,000,000 ] * 100
GDP Growth Rate ≈ 0.0256 * 100
GDP Growth Rate ≈ 2.56%
This means the country's economy grew by approximately 2.56% between the two periods.