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A shorter-period change or amount expressed at a yearly pace.
For quarterly growth, compounding the quarter’s growth factor four times gives the annualised rate. If the quarterly change is g, the calculation is (1 + g)⁴ − 1. Monthly growth would use twelve periods. Official releases specify whether they annualise growth, a level, or neither, so the label should be checked before interpreting a number.
Suppose real GDP rises from 100 to 101 during a quarter. The actual quarterly increase is 1%. Repeating that increase for four quarters gives 1.01⁴ − 1, approximately 4.1% annualised. The economy did not grow 4.1% during the observed quarter, and the calculation does not establish what the next three quarters will do.