A rise in GDP measured at current prices may reflect higher prices. Growth in real terms aims to isolate changes in output. On its own, it does not describe how income is distributed.
Economic growth
In a nutshell
Economic growth measures an increase in a country’s output, usually through changes in GDP adjusted for price movements.
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Explained simply
A practical example
Hypothetical example: if real output rises from an index of 100 to 104, growth is 4%.
Further reading
Source: Insee — Understanding GDP and growth.
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What this means
With a base of 100, real output of 104 means 4% growth.
Educational scenarios. Amounts and rates are fictional, not current market conditions.