The Key Difference Between Growth vs Inflation Rate

growth rate vs inflation rate
Feature	Growth Rate	Inflation Rate
Definition	The rate at which a country’s GDP or economy expands over a specific period.	The rate at which the general level of prices for goods and services rises over time.
Measured By	Change in Gross Domestic Product (GDP).	Change in Consumer Price Index (CPI) or Wholesale Price Index (WPI).
Indicates	Economic expansion, productivity, and output increase.	Decline in purchasing power and rising cost of living.
Desirable Outcome	Moderate to high growth is usually positive.	Moderate inflation is acceptable; high inflation is harmful.
Impact on Economy	Boosts employment, business investment, and income.	Can erode savings, increase cost of borrowing, and reduce purchasing power.
Policy Response	Encouraged via fiscal stimulus and low interest rates.	Controlled via tightening monetary policy and raising interest rates.
Relation	High growth may sometimes lead to inflation.	Rising inflation can slow down economic growth.
Focus	Long-term economic development.	Short-term price stability and cost management.
Ideal Scenario	High growth with low inflation.	Stable inflation supporting consistent growth.
Examples	India’s GDP growing at 7% annually.	Inflation rate rising to 6% due to food and fuel prices.