Economic growth refers to the increase in a country’s production of goods and services over time, typically measured by the rise in Gross Domestic Product (GDP). It indicates the overall health of an economy and plays a crucial role in improving living standards, reducing poverty, and creating job opportunities.
Key Factors Driving Economic Growth
- Capital Investment – More investment in infrastructure, factories, and technology boosts productivity.
- Labor Force Growth – An increase in the working population contributes to higher production.
- Technological Advancements – Innovations improve efficiency and reduce costs, leading to higher output.
- Government Policies – Tax reforms, subsidies, and ease of doing business promote investment.
- Natural Resources – Availability of oil, minerals, and fertile land can enhance economic potential.
- Political Stability – A stable government attracts foreign and domestic investments.
Types of Economic Growth
- Sustainable Growth – Long-term development without harming resources or the environment.
- Inclusive Growth – Ensures benefits are distributed across all sections of society.
- Jobless Growth – GDP rises without a corresponding increase in employment opportunities.
Impact of Economic Growth
✅ Higher income levels – Improves purchasing power and standard of living.
✅ Better public services – More government revenue leads to better healthcare, education, and infrastructure.
✅ Increased investments – Businesses expand, creating new job opportunities.
However, unchecked economic growth can lead to inflation, environmental degradation, and income inequality.
