Glossary · Economy
GDP growth
GDP growth is how fast an economy’s output is rising: usually real GDP compared with a quarter or a year earlier, in percent.
Also called: economic growth, growth rate, GDP growth rate, real GDP growth
Real GDP at an annual rate, Q3 2026.
Real GDP to Q3 2026.
Real growth. Average since 1961: 3.5%.
In plain words
If your town’s bakeries, shops and builders produce 3% more this year than last, after taking price rises out, the town’s economy grew 3%. For a whole country that number is GDP growth: the percent change in real GDP.
It is reported two ways. The US quotes each quarter’s growth “at an annual rate”: how fast the economy would grow in a year if it kept that quarter’s pace. In Q3 2026 that was +3.4%. Most other countries, and many charts, compare with the same quarter a year earlier: +2.1% for the US.
Growth of 2% to 3% a year is normal for a rich country; poorer countries catching up can grow 6% or more for years. Shrinking output for months on end means a recession.
Example
From a quarter to an annual rate
- Real GDP rises from $1,000 billion to $1,005 billion in one quarter: +0.5%.
- At an annual rate: 1.0054 − 1 = 2.0%. That is how the US headline number is quoted.
- If the economy grows 0.5% in each of four quarters, the change from a year earlier is also about 2%; if one quarter is weak and the others strong, the two numbers differ.
- Over 35 years, 2% a year doubles the economy; 3% a year makes it 2.8 times bigger.
Small differences in growth add up: it is the same math as compound interest.
One level deeper
Growth comes from more workers and from each worker producing more (productivity): better machines, skills, ideas and organization. Over long periods productivity is almost everything; it is why living standards rise.
Since 1947, US real GDP grew 3.1% a year on average, which doubles output about every 23 years. The world economy grew 3.5% a year on average since 1961; its worst year was 2020, at −2.9%.
In 2025, according to the IMF, the fastest-growing economy was South Sudan (+41.4%), and 11 of 195 economies shrank. Top spots like that often go to small economies bouncing back from a crisis or starting to pump oil.
US and world growth since 1961
Real GDP growth, year by year. The world figure includes fast-growing poorer countries, so it often runs above the US’s. Both fell below zero in 2009 and 2020.
The numbers behind the chart
| Date | United States | World |
|---|---|---|
| 1961 | 2.6% | 3.9% |
| 1970 | 0.2% | 3.8% |
| 1980 | −0.3% | 1.8% |
| 1990 | 1.9% | 2.7% |
| 2000 | 4.1% | 4.6% |
| 2010 | 2.7% | 4.5% |
| 2020 | −2.1% | −2.9% |
| 2021 | 6.3% | 6.5% |
| 2022 | 2.4% | 3.4% |
| 2023 | 2.9% | 2.9% |
| 2024 | 3.0% | 2.9% |
| 2025 | 2.3% | 2.9% |
Why it matters
Growth decides jobs and incomes: when it slows sharply, unemployment rises; when it is strong, companies hire.
It drives profits, tax revenue and, over long periods, the stock market, and central banks set interest rates partly by it.
Small gaps compound: an economy growing 3% a year instead of 2% ends up about 40% bigger after 35 years.
A common mistake
Myth: A quarter of 4% growth means the economy grew 4% in three months.
In fact: US quarterly growth is quoted at an annual rate: 4% means about 1% in that quarter, multiplied out to a year. Many other countries quote the plain quarterly change, so compare like with like.
Questions people ask
What is a good GDP growth rate?
For rich economies, about 2% to 3% a year of real growth is healthy; faster for long is rare unless a country is catching up. US real GDP changed by +2.1% over the four quarters to Q3 2026.
Which country has the fastest GDP growth?
In 2025 it was South Sudan, at +41.4% (IMF). Our GDP growth by country page ranks every economy.
Why do US GDP numbers get revised?
The first estimate uses incomplete data. As tax records, surveys and trade figures come in, the Bureau of Economic Analysis updates it, sometimes by a percentage point or more at an annual rate.
Read more on BigCapital
About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- Real GDP growth: International Monetary Fund, World Economic Outlook database (October 2026), https://www.imf.org/external/datamapper/NGDP_RPCH@WEO; via the IMF DataMapper API, indicator NGDP_RPCH (Real GDP growth, Annual percent change).
- Real gross domestic product: U.S. Bureau of Economic Analysis, National Income and Product Accounts, series GDPC1; retrieved from FRED, Federal Reserve Bank of St. Louis.
- World GDP growth: World Bank, World Development Indicators: GDP growth (annual %), NY.GDP.MKTP.KD.ZG, aggregate World (WLD).
- This page explains a term. It is not investment advice.