Economic Growth Vs Economic Development- 17 Differences

Table of Contents

Economic Growth:

Economic Growth is the positive change in the indicators of economy.
Economic Growth refers to the increment in amount of goods and services produced by an economy.
Economic growth means an increase in real national income / national output.
It refers to an increase over time in a country’s real output of goods and services (GNP) or real output per capita income.
Economic growth is single dimensional in nature as it only focuses on income of the people.
Earlier, economic growth was only measured in terms of Gross Domestic Product (GDP).
At present, it is measured in terms of GDP, Gross National Income (GNI) and Per Capita Income.
Economic Growth is the precursor and prerequisite for economic development.
Indicators of economic growth are GDP, GNI and per capita income.
Economic growth relates a gradual increase in one of the components of GDP; consumption, government spending, investment or net exports.
It is also considered as a traditional measure of development which indicates the quantitative rise of economy.
Economic growth only looks at the quantitative aspect. It brings quantitative changes in the economy.
Economic growth is concerned with increase in economy’s output.
It focuses on production of goods and services.
Economic growth is more relevant metric for assessing progress in developed countries.
Economic growth is relatively narrow concept as compared to economic development.
It is for short term/short period.
It is a material/physical concept.
Economic growth is measured in certain time frame/period.

Economic Development:

Economic development is the quantitative and qualitative change in an economy.
Economic development refers to the reduction and elimination of poverty, unemployment and inequality with the context of growing economy.
Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care.
Economic development includes process and policies by which a country improves the social, economic and political well-being of its people.
Economic development is multi-dimensional in nature as it focuses on both income and improvement of living standards of the people.
Economic development is concerned with the happiness of public life.
Economic development comes after economic growth. It is a positive impact of economic growth.
Economic development also refers to:
- provision of sufficient and effective physical and social infrastructures
- equal access to resources
- participation of all in economic activities
- equitable distribution of dividends of economy.
Economic development= Economic growth + standard of living
It refers to increase in productivity.
Indicators of economic development are:
- Human Development Index (HDI)
- Human Poverty Index (HPI)
- Gini Coefficient
- Gender Development Index (GDI)
- Balance of trade
- Physical Quality of Life Index (PQLI)
Economic development is the ends of development.
Achieving economic development is linked with end of poverty and inequality.
It is more abstract concept.
Economic development focuses on distribution of resources.

15 Differences between Economic Growth and Economic Development:

Economic Growth	Economic Development
Economic Growth is the positive change in the indicators of economy.	Economic development is the quantitative and qualitative change in an economy.
Economic Growth refers to the increment in amount of goods and services produced by an economy.	Economic development refers to the reduction and elimination of poverty, unemployment and inequality with the context of growing economy.
Economic growth means an increase in real national income / national output.	Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care.
It refers to an increase over time in a country’s real output of goods and services (GNP) or real output per capita income.	Economic development includes process and policies by which a country improves the social, economic and political well-being of its people.
Economic growth focuses on production of goods and services.	Economic development focuses on distribution of resources.
Economic growth relates a gradual increase in one of the components of GDP; consumption, government spending, investment or net exports.	Economic development relates to growth of human capital indexes and decrease in inequality. It is concerned with how people are affected.
Economic growth is single dimensional in nature as it only focuses on income of the people.	Economic development is multi-dimensional in nature as it focuses on both income and improvement of living standards of the people.
Economic Growth is the precursor and prerequisite for economic development. It is the subset of economic development.	Economic development comes after economic growth. It is a positive impact of economic growth.
Indicators of economic growth are: GDP GNI Per capita income	Indicators of economic development are: Human Development Index (HDI) Human Poverty Index (HPI) Gini Coefficient Gender Development Index (GDI) Balance of trade Physical Quality of Life Index (PQLI)
It is for short term/short period. It is measured in certain time frame/period.	It is a continuous and long-term process. Economic development does not have specific time period to measure.
Economic growth only looks at the quantitative aspect. It brings quantitative changes in the economy.	Economic development brings quantitative and qualitative change in the economy.
Economic growth is an automatic process that may or may not require intervention from the government	Economic development requires intervention from the government as all the developmental policies are formed by the government
It refers to increase in production.	It refers to increase in productivity.
It is the means of development.	It is the ends of development.
Economic growth is relatively narrow concept as compared to economic development.	It is a broader concept than economic development.
Economic growth is concerned with increase in economy’s output.	It is concerned with structural changes in the economy. Economic development= Economic growth + standard of living
It is not concerned with happiness of public life.	It is concerned with happiness of public life.
Poverty and inequality may remain in economic growth	Achieving economic development is linked with end of poverty and inequality.
Economic growth is more relevant metric for assessing progress in developed countries.	More relevant to measure progress and quality of life in developing countries.
It is a material/physical concept.	It is more abstract concept.