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Improved standards of living

Economic growth should lead to a higher income per head which can in turn lead to higher levels of consumption and a better standard of living.

Tax revenues

Economic growth is associated with higher levels of spending in the economy. This generates more tax revenue for the government.


Economic growth leads to higher levels of employment in the economy. A rise in real GDP caused by higher aggregate demand is likely to create extra jobs. An increase in aggregate supply may make a country’s products more internationally competitive and so may generate more jobs.

Consumer confidence

A stable rate of economic growth tends to increase business and consumer confidence. This encourages investment. Indeed, economic growth can create economic growth.

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Benefits of economic growth

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