ECONOMIC GROWTH AND

DEVELOPMENT
Group 8
Cawagas, Fedelene Joy
Deleste, Krisha Nicole
De Juan, Roevarc
Falsis, Hamuel Illiel
Gaitan, Aurora Demi Doreen
Tumabotabo, Anne Rae

What is Economic Growth?
• Increase in a country's real
level of national output.
• Increase in the quantity of
resources & improvements
in technology or in another
way an increase in the value of
goods and services produced
by every sector of the
economy.

• Does not take into account the
depletion of natural resources
which might lead to pollution,
congestion & disease.
• Measures an increase in Real
GDP. (real Output).
▫ GDP is a measure of the
national income / national
output and national
expenditure. It basically
measures the total volume of
goods and services produced
in an economy.

Economic Development
• Increase in living standards,
improvement in self-esteem
needs and freedom from
oppression as well as a greater
choice.
• Most accurate method of
measuring development is
the Human Development
Index which takes into account
the literacy rates & life
expectancy
which affect productivity and
could lead to Economic Growth.

• Leads to the creation of more
opportunities in the sectors of
education, healthcare,
employment and the
conservation of the
environment.
• Implies an increase in the per
capita income
• Is concerned with how people
are actually affected.
• Looks at the actual living
standards of every citizen.

Economic Development versus Economic Growth
Economic Development
Economic development
implies changes in income,
savings and investment
along with progressive
Implications changes in socio-economic
structure of country
(institutional and
technological changes).
Development relates to
growth of human capital
indexes, a decrease in
Factors inequality figures, and
structural changes that
improve the general
population's quality of life.
Qualitative.HDI (Human
Development Index),
gender- related index (GDI),
Measurement Human poverty index (HPI),
infant mortality, literacy rate
etc.

Economic Growth
Economic growth refers to
an increase in the real
output of goods and services
in the country.

Growth relates to a gradual
increase in one of the
components of Gross
Domestic Product:
consumption, government
spending, investment, net
exports.
Quantitative. Increases in
real GDP.

Continuation…

Brings qualitative
and quantitative
Effect changes in the
economy
Economic development
is more relevant to
measure progress and
quality of life in
Relevance developing nations.

Concerned with
Scope structural changes in the
economy

Brings quantitative
changes in the
economy
Economic growth is a
more relevant metric for
progress in developed
countries. But it's widely
used in all countries
because growth is a
necessary condition for
development.
Growth is concerned
with increase in the
economy's output

Formula for calculating

Economic Growth

where GDP = previous yea
GDP
GDP₂ = present yea
GDP

We can express the rate of growth in, for example,
the period 2004-2005, as follows:
Growth rate of GDP = [GDP(2005) GDP(2004)]/ GDP(2004) × 100

U.S. real GDP in 2004 was 10.76 trillion and in
2005 it was 11.13 trillion. Thus the growth rate of
real U.S. GDP from 2004 to 2005 was
(11.13 – 10.76) / 10.76 = (0.37) / 10.76 =
0.034 or 3.4%

Formula used in
calculating the

Gross National
Product

 Gross national product
(GNP) is the total value of final
goods and services produced
during a given period by the
citizens of a country no matter
where they live. The goods and
 GNP
services
are produced
by the
are expressed
in monetary
“nationals”
of aon
country.
terms,
thus rely
the
markets to establish the
relative values of goods and
services.

The formula for GNP is:

GNP = Consumption +
Government Expenditures
+ Investments + Exports +
Foreign Production by U.S.
Companies – Domestic
Production by Foreign
Companies

How it works :
GNP includes income earned by citizens
and companies abroad, but does not
include income earned by foreigners
within the country.
The figures used to assess GNP include
the manufacturing of tangible goods
(cars, furniture and agricultural
products) and the provision of services
(education, healthcare, and business
services).
GNP does not include the services used

Methods used to assess
Economic Development

Methods used to assess Economic
Development





GNP per capita
Population Growth
Occupational Structure of the Labor Force
Urbanization
Consumption per capita
Infrastructures

GNP per Capita
• GNP is the total market value of all final goods
and services produced by a country in one year.
It is a measure of economic activity, or how
much is produced in a country. The more that a
country produces per person , the more
"developed" it is assumed to be.

Population Growth
In general, poorer countries have more rapid
rates of population growth thus affecting their
economic development in a way that there is an
unequal distribution of goods and services
especially among large, poor families.

As countries develop,
the occupational
Occupational
Structure
of the Laborstructure
Force
of the labor force changes. In least developed
countries, most people are engaged in primary
activities like agriculture, fishing, mining and
lumbering. In high income countries like the
United states most people are involved with the
tertiary sector like retailing, transportation,
education and banking. The better the labor
force opportunities signifies a more developed
country.

Urbanization
Urbanization is the percentage of a country's
population who live in urban areas. Urban areas
generally means in towns and cities of 2,500 or
more people. Currently just less than half of the
worlds population live in urban areas. Generally
as countries develop urbanization increases.

Consumption per capita
Consumption per person is a good indicator of
development. The richer a country is, the more
its citizens consume.

Infrastractures
A country's infrastructure is defined by our author as
"the foundations of a society: urban centers,
transport networks, communications, energy
distribution systems, farms, factories, mines, and
such facilities as schools, hospitals, postal services,
and police and armed forces."
For instance, the development of the transportation
system as a measure of its length per area of land has
a greater degree of economic development assumed
because of its transportation infrastractures.

List of Countries according to
Stages of Economic Growth.

Top 10 Competitive Countries in the World 2014-2015 report

Rank
1
2
3
4
5
6
7
8
9
10

Country
Switzerland
Singapore
United States
Finland
Germany
Japan
Hong Kong SAR
Netherlands
United Kingdom
Sweden

Value
5.7
5.6
5.5
5.5
5.5
5.5
5.5
5.5
5.4
5.4

Source: http://reports.weforum.org/global-competitiveness-report2014-2015/

10 Most Developed Countries in the World 2015 (HDI)
Ran
k

Country

HDI Score

1

Norway

0.944

2

Australia

0.933

3

Switzerland

0.917

4

Netherlands

0.915

5

United States

0.914

6

Germany

0.911

7

New Zealand

0.910

8

Canada

0.902

9

Singapore

0.901

10

Denmark

0.900

Source: http://www.richestlifestyle.com/10-most-developedcountries-in-the-world/

Top 10 Richest Countries 2015
Rank

Country

GDP per Capita (est.)

1

Qatar

$145,894

2

Luxembourg

$90,333

3

Singapore

$78,762

4

Brunei

$73,823

5

Kuwait

$70,785

6

Norway

$64,363

7

United Arab
Emirates

$63,181

8

San Marino

$62,766

9

Switzerland

$53,977

10

United States

$53,001

Source: http://mixtopten.com/top-10-richest-countries-for-2015/