This graph compares the annual growth rate of New Zealand’s gross domestic product (GDP) in actual numbers (the nominal GDP) with the real GDP growth once the effects of price inflation are taken into account (the volume GDP). In the 1970s and 1980s there was high annual inflation, so in purely numerical terms the growth of GDP appeared spectacular – 14.6% and 13.5% per year for each period. But when the effect of inflation is removed, the annual volume growth rates were modest – only 2.2% and 1.8%. In the 1990s and early 2000s GDP increased more slowly in numerical terms, but in the light of a much lower level of inflation, the real growth of GDP was considerably higher.