In such a case, per capita increase in GNP would be 7.4% (=9.1-1.7). For example, in 2005-2006, the rate of increase in India’s GNP was 9.1%, while its population growth rate was 1.7%. In real sense, economic growth is related to increase in per capita national output or net national product of a country that remain constant or sustained for many years.Įconomic growth can be achieved when the rate of increase in total output is greater than the rate of increase in population of a country. An important characteristic of economic growth is that it is never uniform or same in all sectors of an economy For example, in a particular year, the telecommunication sector of a country has marked a significant contribution in economic growth whereas the mining sector has not performed well as far as the economic growth of the country- is concerned.Įconomic growth is directly related to percentage increase in GNP of a country. It is performed by taking into consideration various economic variables, such as demand, supply, prices, production cost, wages, labor, and capital.Įconomic growth can be defined as a positive change in the level of goods and services produced by a country over a certain period of time. Moreover, economic analysis helps in assessing the causes of different economic problems, such as inflation, depression, and economic instability. It is a systematic process for determining the optimum use of scarce resources and selecting the best alternative to achieve the economic goal.
The economic growth of a country is possible if strengths and weaknesses of the economy are properly analyzed.Įconomic analysis provides an insight into the essentials of an economy.
The economic growth of a country can be measured by comparing the level of Gross National Product (GNP) of a year with the GNP of the previous year. This enables the government to earn extra income for the further development of an economy. Apart from this, it plays a vital role in stimulating government finances by enhancing tax revenues.