High income - Gross capital formation (% of GDP)

Gross capital formation (% of GDP) in High income was 22.32 as of 2020. Its highest value over the past 50 years was 27.80 in 1974, while its lowest value was 20.30 in 2009.

Definition: Gross capital formation (formerly gross domestic investment) consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories. Fixed assets include land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings. Inventories are stocks of goods held by firms to meet temporary or unexpected fluctuations in production or sales, and "work in progress." According to the 1993 SNA, net acquisitions of valuables are also considered capital formation.

Source: World Bank national accounts data, and OECD National Accounts data files.

See also:

Year Value
1970 26.35
1971 26.03
1972 26.30
1973 27.58
1974 27.80
1975 24.64
1976 25.70
1977 25.81
1978 26.27
1979 26.84
1980 26.00
1981 25.27
1982 24.02
1983 23.81
1984 25.09
1985 24.52
1986 24.55
1987 24.80
1988 25.71
1989 25.99
1990 25.54
1991 24.74
1992 24.02
1993 23.41
1994 24.03
1995 24.30
1996 24.17
1997 24.12
1998 23.92
1999 23.99
2000 24.40
2001 23.22
2002 22.41
2003 22.37
2004 22.83
2005 23.29
2006 23.76
2007 23.82
2008 23.28
2009 20.30
2010 21.08
2011 21.57
2012 21.51
2013 21.46
2014 21.82
2015 22.11
2016 21.89
2017 22.23
2018 22.45
2019 22.76
2020 22.32

Limitations and Exceptions: Because policymakers have tended to focus on fostering the growth of output, and because data on production are easier to collect than data on spending, many countries generate their primary estimate of GDP using the production approach. Moreover, many countries do not estimate all the components of national expenditures but instead derive some of the main aggregates indirectly using GDP (based on the production approach) as the control total. Data on capital formation may be estimated from direct surveys of enterprises and administrative records or based on the commodity flow method using data from production, trade, and construction activities. The quality of data on government fixed capital formation depends on the quality of government accounting systems (which tend to be weak in developing countries). Measures of fixed capital formation by households and corporations - particularly capital outlays by small, unincorporated enterprises - are usually unreliable. Estimates of changes in inventories are rarely complete but usually include the most important activities or commodities. In some countries these estimates are derived as a composite residual along with household final consumption expenditure. According to national accounts conventions, adjustments should be made for appreciation of the value of inventory holdings due to price changes, but this is not always done. In highly inflationary economies this element can be substantial.

Statistical Concept and Methodology: Gross domestic product (GDP) from the expenditure side is made up of household final consumption expenditure, general government final consumption expenditure, gross capital formation (private and public investment in fixed assets, changes in inventories, and net acquisitions of valuables), and net exports (exports minus imports) of goods and services. Such expenditures are recorded in purchaser prices and include net taxes on products.

Aggregation method: Weighted average

Periodicity: Annual

Classification

Topic: Economic Policy & Debt Indicators

Sub-Topic: National accounts