Lower middle income - Gross capital formation (% of GDP)

Gross capital formation (% of GDP) in Lower middle income was 27.39 as of 2020. Its highest value over the past 53 years was 49.64 in 1977, while its lowest value was 24.29 in 1988.

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
1967 30.00
1968 30.10
1969 31.42
1970 33.18
1971 34.06
1972 34.06
1973 37.59
1974 37.83
1975 42.78
1976 46.83
1977 49.64
1978 48.72
1979 41.76
1980 47.43
1981 40.03
1982 35.82
1983 33.39
1984 29.17
1985 26.24
1986 25.31
1987 24.38
1988 24.29
1989 26.09
1990 28.84
1991 26.13
1992 26.71
1993 25.77
1994 26.47
1995 26.60
1996 26.54
1997 26.53
1998 25.90
1999 25.54
2000 24.54
2001 24.91
2002 25.16
2003 27.10
2004 29.81
2005 29.97
2006 30.23
2007 31.81
2008 31.01
2009 32.09
2010 32.06
2011 31.15
2012 31.07
2013 28.99
2014 29.36
2015 28.52
2016 28.05
2017 28.88
2018 29.66
2019 29.23
2020 27.39

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