The difference between 20 percent and 30 percent is 10 percentage points, not 10 percent. In fact, an increase from 20 to 30 percent is an increase of 50 percent. Only if, for example, 20 percent of buyers choose a certain company's products in one year and 22 percent do so the next year, can one speak of an increase of 10 percent.

Economics is a messy discipline: too fluid to be a science, too rigorous to be an art. Perhaps it is fitting that economists’ most-used metric, gross domestic product (GDP), is a tangle too. GDP measures the total value of output in an economic territory. Its apparent simplicity explains why it is scrutinised down to tenths of a percentage point every month.

Percentage point

Meaning

Noun

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