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

Gross capital formation (% of GDP) in Upper middle income was 35.39 as of 2020. Its highest value over the past 60 years was 35.39 in 2020, while its lowest value was 19.33 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 30.73
1961 22.52
1962 19.33
1963 21.25
1964 22.74
1965 24.38
1966 25.40
1967 22.65
1968 22.86
1969 23.88
1970 27.15
1971 27.41
1972 26.19
1973 26.85
1974 27.80
1975 29.36
1976 27.52
1977 27.52
1978 27.15
1979 26.74
1980 27.25
1981 27.83
1982 25.79
1983 23.46
1984 23.64
1985 25.38
1986 24.36
1987 24.90
1988 26.70
1989 27.88
1990 27.24
1991 27.08
1992 26.99
1993 26.85
1994 26.95
1995 25.91
1996 25.59
1997 24.74
1998 23.76
1999 23.35
2000 24.07
2001 24.65
2002 25.10
2003 26.57
2004 27.86
2005 27.30
2006 27.89
2007 29.10
2008 30.86
2009 30.87
2010 32.42
2011 33.29
2012 33.48
2013 34.05
2014 34.07
2015 33.81
2016 33.41
2017 33.52
2018 34.46
2019 34.11
2020 35.39

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