Difference Between Economic Growth And Economic Development(With Table)

There has been a huge debate on economic growth and economic development for a very long time. Both these terminologies are very common in economics and the business world. Many people often use these words interchangeably but there is an obvious difference between them.  In this article, we will get to know the complete difference between them. This blog has the following main topics. 

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Definition Of Economic Growth

Economic growth is a constant and steady rise in the real GDP(Gross Domestic Product) and the GNP(Gross National Product) of a nation over a period of time. This means that economic growth is actually an increase in the output of the country from one period of time to another period of time. This concept is basically related to already stabled and developed states. It is the quantitive measure that let us know how much a country has progressed since last year.  Economic growth is actually a feature of economic development.

For example, let’s suppose a country’s annual revenue in 2020 was 100 million and in 2021 its budget is 105 million. So, this 5% growth of GDP or annual revenue is called economic growth. This outcome is obtained by the increase in the quality and quantity of the resources and advancement. 

Definition Of Economic Development

Economic development generally refers to the progress and social well-being of a country. It includes improved living standards of the people, schools, hospitals, good educational institutions, better health facilities, and infrastructural changes in the country. It is generally related to the unstable and developing countries of the world.

This qualitative measure refers to the life of the citizens and it is determined by HDI(Human Development Index). The overall development of the country is based on the standard of living, living conditions, advancement in technology, industrial and infrastructural development, etc. 

Economic Growth Vs Economic Development(Comparison Table)

Key Differences Between Economic Growth And Economic Development

Some of the major differences between economic growth and economic development are as follows.

• Economic growth is a constant and steady rise in the real GDP(Gross Domestic Product) and the GNP(Gross National Product) of a nation over a period of time. On the other hand, Economic development generally refers to the progress and social well-being of a country. It includes improved living standards of the people, schools, hospitals, good educational institutions, better health facilities, and infrastructural changes in the country. 

• Economic Growth does not focus on contemplating the income from the informal economy. On the other hand, Economic Development examines all the formal and informal activities in order to ease the people with low standards of living with proper shelter and employment.  

• While Economic Growth is a short-term process that considers the yearly growth of the economy, Economic Development is a long-term process. 

• Economic Growth can be measured when there is a positive change and an increase in the GDP, per capita income, etc. However, Economic Development can be measured through development in the life infant mortality rate, anticipation rate, literacy rate, etc.   

• Economic growth is measured over a specific period of time whereas economic development can be measured in the long run as it is a continuous process of improvement.

Conclusion

So, with the above explanations and discussions, we can simply say that both economic growth and economic development help in the progress, growth, and development of national income or economy. While Economic Growth is a short-term process that considers the yearly growth of the economy and Economic Development is a long-term process.  So, we believe that this article was helpful to you.

Reference:

• https://www.topuniversities.com/courses/finance/guide