Middle income - Gross capital formation (% of GDP)

Gross capital formation (% of GDP) in Middle income was 33.45 as of 2020. Its highest value over the past 60 years was 34.92 in 1977, while its lowest value was 22.98 in 1962.

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
1960 32.13
1961 24.81
1962 22.98
1963 24.15
1964 25.73
1965 27.89
1966 28.95
1967 26.20
1968 26.32
1969 27.51
1970 30.62
1971 31.14
1972 30.23
1973 31.73
1974 32.43
1975 34.91
1976 34.25
1977 34.92
1978 34.36
1979 32.35
1980 34.13
1981 32.52
1982 29.79
1983 27.52
1984 25.82
1985 25.67
1986 24.68
1987 24.63
1988 25.76
1989 27.15
1990 27.55
1991 26.79
1992 26.87
1993 26.56
1994 26.82
1995 26.08
1996 25.83
1997 25.19
1998 24.28
1999 23.92
2000 24.19
2001 24.71
2002 25.10
2003 26.71
2004 28.37
2005 27.99
2006 28.50
2007 29.80
2008 30.90
2009 31.18
2010 32.33
2011 32.76
2012 32.89
2013 32.86
2014 32.96
2015 32.52
2016 32.05
2017 32.37
2018 33.32
2019 32.92
2020 33.45

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