GDP Growth Rate Calculator (Multi-Year)
Calculate the Compound Annual Growth Rate (CAGR) of an economy over any period.
(In Billions, Trillions, or Local Currency)
(At the end of the period)
Results:
Total Cumulative Growth:
Average Annual Growth (CAGR):
Total Absolute Increase:
How to Calculate GDP Growth Rate Over Several Years
Measuring economic progress requires looking beyond a single year's performance. When analyzing growth over a long duration, economists use two primary metrics: Total Growth and the Compound Annual Growth Rate (CAGR).
The CAGR Formula
To find the average annual growth rate when you have data for multiple years, the following formula is used:
CAGR = [(Ending GDP / Starting GDP)1 / n – 1] × 100
Where n represents the number of years in the period.
Steps for Calculation
- Identify the Period: Determine the starting year and the ending year.
- Gather Real GDP Data: Use Real GDP (inflation-adjusted) for the most accurate measure of actual economic expansion.
- Divide Final by Initial: Divide the GDP of the last year by the GDP of the first year.
- Apply the Exponent: Raise the result to the power of (1 divided by the number of years).
- Convert to Percentage: Subtract 1 from the result and multiply by 100.
Practical Example
Suppose a country's GDP was $500 Billion in 2015 and grew to $650 Billion by 2020 (a 5-year period).
- Total Growth: (($650 – $500) / $500) × 100 = 30%
- Annual Growth (CAGR): (($650 / $500)1/5 – 1) × 100 = 5.39%
While the total growth was 30%, the economy actually expanded at a compounded rate of 5.39% per year.