CORRECT INTERPRETATION AND ANALYSIS

A strong rate of GDP growth and the interpretation of strong will differ between countries – is good news in as much as it means, other things equal, higher profits. However, because a prolonged robust pace of growth puts pressure on capacity – which does not necessarily expand as quickly – it represents an inflationary risk, which can lead to higher interest rates. So, the growth rate of GDP should be strong enough to create wealth, employment, etc., but not so strong as not to generate more inflation than central bankers are ready to tolerate.