To discover what economic growth is and why it’s critical to a country’s success, simply continue reading. To find a handy, easy to read explanation of economic growth. As well as a few key facts on why economic growth is so crucial to a country’s long term success.
Economic Growth Explained:
What is economic growth?
Simply put economic growth occurs when the value of a country’s GDP rises over time, in an inflation adjusted market. Usually statisticians calculate a country’s economic growth by measuring the percentage rate of increase of a country’s real gross domestic product. The latter of which is also referred to by the acronym GDP.
What are some of the key factors which can impact a country’s economic growth?
There are a wide variety of factors which can can significantly impact a country’s economic growth. For example, a country’s policies can impact economic growth. In recent years countries such as Saudi Arabia, which one had strict laws which prohibited many women from working outside their homes, relaxed their laws. Which caused their national GDP to increase. As when women join a country’s workforce a country’s GDP can skyrocket.
Another factor which can influence a country’s economic growth is its natural resources. As an example as Australia naturally is rich in valuable natural resources such as gold, opals and diamonds, Australia’s economic growth is bolstered by its willingness to take advantage of its natural resources.
What are some of the international factors that can impact a country’s growth:
While a country’s domestic policies can effect growth, international circumstances can also impact a country’s economic growth. For example, the Coronavirus pandemic which adverse effected most countries around the world, had a huge effect on country’s GDP. In fact, many countries actually entered a recession as a result of the pandemic. Some examples of which include South Korea and Japan. Both of which had experienced increased economic growth in recent years.
Another international factor which often impacts a country’s growth is the ability of a country to negotiate competitive deals with numerous trading partners. As an example both the US economy and the Chinese economy are bolstered by their mutual trade agreements, which benefit both countries when it comes to exporting their country’s products.
So if you were unsure about what economic growth is and how it can be effected by various domestic and international factors, hopefully you now have a clearer understanding of economic growth and its importance.