Definition
- Real GDP growth
- Real GDP growth is the percentage change in the value of everything an economy produces, measured after the effect of rising prices has been taken out.
Example
Can you think of an example of real GDP growth?
Nominal GDP rises from £2,400 billion to £2,472 billion, up 3 per cent. Prices rose 2 per cent over the year, so real GDP grew by only about 1 per cent.
Test yourself
Can you name the six indicators most often used to judge how the UK economy is doing?