Economic Growth vs Economic Development

Economic growth refers to an increase in the real output of goods and services in the country. Economic development implies changes in income, savings and investment along with progressive changes in socio-economic structure of country (institutional and technological changes).

Factors

Growth relates to a gradual increase in one of the components of Gross Domestic Product: consumption, government spending, investment, net exports.

Development relates to growth of human capital, decrease in inequality figures, and structural changes that improve the quality of life of the population.

Measurement

Economic Growth is measured by quantitative factors such as increase in real GDP or per capita income.

The qualitative measures such as HDI (Human Development Index), gender-related index, Human poverty index (HPI), infant mortality, literacy rate, etc. are used to measure economic development.

Effect

Economic growth brings quantitative changes in the economy.

Economic Development leads to qualitative as well as quantitative changes in the economy.

Relevance

Economic growth reflects the growth of national or per capita income.

Economic development reflects progress in the quality of life in a country.