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ANNUALISED GROWTH RATE (ANNUALISED RATE OF CHANGE)

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Definition:
Annualised growth rates (Annualised rate of change) show the value that would be registered if the quarter-on-previous quarter or month-on-previous month rate of change were maintained for a full year.

Context:
Annualised growth rates attempt to facilitate comparison of data for different time periods (e.g. years and quarters). However, because the impact of any irregular is magnified, use of this form of growth rate presentation is not recommended, especially as the key headline series.

In addition to the compounded form of the Annualised growth rate presented here, the term “Annualised growth rate” is sometimes used to describe the quarterly or monthly growth rate multiplied by four or twelve.

Multiplying the quarterly or monthly growth rate by four or twelve is more appropriately referred to as “Linear approximation of the annualised growth rate”.

Some agencies use the expression “1-month rate of change, annualised”, etc, for such rates.

Source Publication:
OECD, 2005, Data and Metadata Reporting and Presentation Handbook, OECD, Paris, Section 3: Guidelines for the reporting of different types of data.

Cross References:
Annualised semi-annual growth rate
Linear approximation of the annualised growth rate

Statistical Theme: Methodological information (metadata)

Created on Monday, July 11, 2005

Last updated on Monday, July 18, 2005