Difference Between Economic Growth and Economic Development

By : Neha Dhyani

Updated : Apr 8, 2022, 9:34

Even though the terms Economic Growth and Economic Development seem very similar, the Difference Between Economic Growth and Economic Development may shock you. Simply put, the main reason why these two terms are different is that economic growth refers to quantitative increases, such as the monetary growth of a nation, whereas economic development is both a quantitative and qualitative concept. In the following sections, let's know more about these two terms in detail.

Economic Growth

Economic growth is alluded to as the increment that is seen in the money-related worth of the multitude of labour and products delivered to the economy during a time span. This quantitative measure mirrors the possible expansion in the number of deals occurring in the economy. The nature of economic growth is single-dimensional if it is compared to economic development because the main focus of economic growth is the income of the individuals. Economic growth earlier used to be measured in terms of GDP (Gross Domestic Product). Now, GDP, Gross National Income (GNI), and Per Capita Income are used to estimate economic growth.

Economic Development

Economic development alludes to the process by which the general well-being, prosperity, and academic level of the people of a country move along. It also alludes to the better production volume because of the headways of innovation. As previously mentioned, economic development is a qualitative measure of the life of the people of a nation which is determined using the Human Development Index (HDI).

The general progress of a nation depends on numerous parameters, like - the production of open positions, technological advancements, way of life, day-to-day environments, per capita income, personal satisfaction, confidence, GDP, modern and infrastructural development, etc. Needless to say, the nature of economic development is multi-dimensional, unlike economic growth, because it puts its focus on both income and improvement of living standards of the citizens of a country.

Differences between Economic Growth and Economic Development

Economic Growth

Economic Development

Economic growth alludes to the expansion in money-related development of a country in a specific period.

Economic development alludes to the general progress of the lifestyle in a country, which also incorporates economic development.

The concept of economic growth is narrower compared to economic development.

The span of the concept of economic development is broad.

Economic growth is a single-dimensional or uni-dimensional approach because its prime focus is on the economic growth of the nation.

Economic development is a multi-dimensional approach as it focuses on the income of the country as well as the quality of life of its citizens.

Example: GDP, GNP

Example: HDI, per capita Income, industrial development

Economic growth doesn't necessarily require government intervention as it is an automatic process.

Economic development requires government intervention because the government forms all the developmental policies of a nation.

Both economic development and economic growth are equally important for the gradual improvement of a country. This progress leads to higher average income and lowers the rate of unemployment in a country.

FAQ on Difference Between Economic Growth and Economic Development

Q.1) What is the Difference Between Economic Growth and Economic Development?

The Difference Between Economic Growth and Economic Development is that while economic growth alludes to the expansion in the money-related development of a country in a specific period, economic development alludes to the general development of lifestyle in a country, which also incorporates economic development.

Q.2) What is the Difference Between Economic Growth and Economic Development in terms of scale?

The Difference Between Economic Growth and Economic Development in terms of scale is that while economic growth is narrower than economic development, the span of the concept of economic development is broad.

Q.3) What is the Difference Between Economic Growth and Economic Development in terms of government intervention?

The Difference Between Economic Growth and Economic Development in terms of government intervention is that economic growth doesn't necessarily require government intervention as it is an automatic process. Whereas, economic development requires government intervention because the government forms all the developmental policies of a nation.

Q.4) What is the Difference Between Economic Growth and Economic Development in terms of examples?

The Difference Between Economic Growth and Economic Development in terms of examples is that the examples of economic growth include GDP, GNP, while the examples of economic development include HDI, per capita income, and industrial development.