Factors that determine economic growth
The quantitative expansion of national output is determined by a number of factors.
The natural resource base. Economic growth is often influenced by the rate of change of natural resource base and its quality. These could include, soils, minerals, water, landscape, etc.
Ideal or optimum population. Population growth rates are usually determined by birthrates, death rate, net migration, etc. The size of a country's population determines its economic growth rate, from which the productive labour force can be derived.
The rate of capital accumulation and effective utilization of resources. This, too, can determine the rate of economic growth.
Availability of entrepreneurs. The existence of entrepreneural ability will influence the rate at which the economy can grow, since entrepreneurs are able to invest and increase the volume of output in the nation.
Market. The market potential can determine the rate of economic growth and production. In economics, the extent of production is usually determined by the extent of the market.
Political stability. The rate of economic progress can be determined by a stable political atmosphere. Stability tends to stimulate and promote investments, thereby increasing the rate of output creation, necessary for economic growth and development.
Socio-cultural attitudes should be removed so as to stimulate economic growth. Cultural hinderances need to be overcome to pave way for economic progress.
Infrastructural development. Adequate social and economic infrastructure is necessary for economic growth. This includes roads, hospitals, dams, railways, etc, which aim at stimulating production activities.
Appropriate planning and effective implementation of the de developmental programmes are quite crucial to enhance economic growth in country.
Terms of Trade. Favourable foreign influence and climate can determine the of economic growth e.g. favourable terms of trade.
The labour force. The quantity and quality of the labourforce is very significant for the economic growth and development of a country.