How to calculate the average annual growth rate

The value of the growth rate is used in the dynamic analysis of the speed and intensity of the development of a process or phenomenon. For its calculation, quantitative values ​​obtained at certain intervals of time are used. Growth rates are divided into basic and chain. Basic growth rates are calculated from a certain value taken as the base, chain - from the value in the previous period.

Instruction manual

1

Growth rates are expressed as a percentage. If we calculate the average annual growth rate, the analyzed period will be from January 1 to December 31. It coincides not only with the calendar year, but also with the financial year usually taken into account in statistics. It is most convenient to take the value of the base indicator, for which growth rates of 100% will be determined. Its value in absolute terms should be known on January 1.

2

Determine the absolute values ​​of indicators at the end of each month of the year (APi). Calculate the absolute values ​​of the growth of indicators (Pi) as the difference between the two compared levels, one of which will be the base value of the indicators as of January 1 (By), and the second will be the values ​​of the indicators at the end of each month (Pi):

APi = Po - Pi, you should get twelve such absolute values ​​of monthly growth, according to the number of months.

3

Add all the absolute values ​​of the growth for each month and divide the resulting amount by twelve - the number of months in a year. You will get the average annual growth rate in absolute units (P):

P = (AP1 + AP2 + AP3 +

+ AP11 + AP12) / 12.

4

Determine the average annual base growth factor Kb:

Kb = P / Po, where

By - value of the indicator of the base period.

5

Express the average annual base growth rate as a percentage and you will get the value of the average annual growth rate (TRsg):

TRsg = Kb * 100%.

6

Using indicators of average annual growth rates over several years, you can trace the intensity of their changes over the long-term period under consideration and use the obtained values ​​to analyze and forecast the development of the situation in the economy, industry, and the financial sector.

Useful advice

In analytical calculations, coefficients and growth rates are equally often used. They have an identical essence, but are expressed in different units.

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• We calculate the average annual growth rate