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How can the GDP's growth rate be positive, when the GDP decreases?

Economics Asked on July 29, 2021

I have question about following charts in Mozambique. Here is GDP of Mozambique in 2010-2016 – https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2019&locations=MZ&start=2008. You can clearly see that GDP grows from 11 billion to 17.8 billion and then lowers in 2014-2016 from that number to 12 billion dollars. However, the GDP growth rate remains positive (between 6-7 % – https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2019&locations=MZ&most_recent_value_desc=false&start=2005). How is it possible, shouldn’t the "GDP growth" be negative?

I understand the growth rate isn’t as easy as year-2-year change. Perhaps there is inflation (that was pretty low in Mozambique, around 2%), maybe exchange rate plays a role as well?
Thank you a lot for answer!

One Answer

Your first link is "GDP (current US$)".

Your second link "GDP growth (annual %)" is "based on constant local currency" (from "Details").

For figures that correctly correspond to your second link, see instead this third link: "GDP (constant LCU)" (LCU = local currency unit).

The discrepancy between the first and third links is explained by the great fall in the Mozambican metical (against the USD) in 2015 and 2016:

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Answered by user18 on July 29, 2021

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