What is economic stability?

Economic stability is a common term used to describe the financial system of a country that shows a consistently low rate of inflation and minor variations in the output growth. It is normally believed to be a desirable condition for any developed state, and the central bank is often seen encouraging the process through various plans, policies and actions.

There are a number of different factors that affect the economic stability of a country, such as development of technology, human capital, levels of infrastructure, geographical location, weather, political instability and commodity prices. The economic growth of any country defines the annual percentage increase in the gross domestic product.