Bahrain has a GDP of $47.7B compared to $764M for Sao Tome and Principe, ranking 95/197 and 189/197 by economy size, respectively.
Bahrain has $64B in government debt (141.4% of GDP), compared to $332M (37.3% of GDP) in Sao Tome and Principe.
The chart below compares the two countries' GDP growth in both current (nominal) and constant dollars, accounting for inflation over time.
| Year | GDP | |||
|---|---|---|---|---|
Bahrain
|
Sao Tome
|
|||
| Current $ | Constant $ | Current $ | Constant $ | |
| 1970 | $391,577,364 | $3,916,965,158 | $37,211,826 | $76,468,736 |
| 1971 | $422,181,562 | $3,979,916,383 | $37,288,845 | $80,579,183 |
| 1972 | $534,081,184 | $4,420,574,963 | $41,430,257 | $82,425,279 |
| 1973 | $761,132,545 | $5,036,098,060 | $56,011,245 | $83,737,737 |
| 1974 | $1,042,176,884 | $5,462,767,480 | $57,817,591 | $88,497,202 |
| 1975 | $1,099,107,601 | $4,980,141,416 | $60,101,710 | $93,256,667 |
| 1976 | $1,581,709,519 | $6,497,904,126 | $52,039,421 | $94,785,465 |
| 1977 | $1,989,060,283 | $7,343,778,518 | $49,207,692 | $116,981,878 |
| 1978 | $2,272,042,965 | $7,627,414,970 | $55,044,563 | $120,371,194 |
| 1979 | $2,710,160,739 | $7,892,030,438 | $65,755,928 | $140,043,649 |
| 1980 | $3,493,834,468 | $8,095,666,864 | $81,662,231 | $138,529,274 |
| 1981 | $3,943,109,532 | $7,665,244,758 | $83,499,264 | $124,241,500 |
| 1982 | $4,145,421,080 | $7,086,042,176 | $80,307,763 | $128,084,021 |
| 1983 | $4,247,030,468 | $7,537,874,925 | $75,110,289 | $123,122,082 |
| 1984 | $4,440,874,566 | $7,915,043,506 | $78,213,796 | $115,697,255 |
| 1985 | $4,152,376,484 | $7,538,424,481 | $82,733,069 | $126,456,967 |
| 1986 | $3,470,746,843 | $7,627,603,584 | $115,928,907 | $119,081,847 |
| 1987 | $3,856,922,694 | $8,420,798,792 | $115,952,925 | $115,592,613 |
| 1988 | $4,209,834,173 | $9,010,254,004 | $99,000,764 | $117,902,998 |
| 1989 | $4,393,093,963 | $9,043,051,972 | $98,545,367 | $121,599,629 |
| 1990 | $4,809,511,005 | $9,444,382,363 | $119,297,933 | $118,982,020 |
| 1991 | $5,248,911,170 | $10,504,986,340 | $107,484,143 | $120,410,999 |
| 1992 | $5,402,232,447 | $11,207,769,729 | $94,861,781 | $121,253,872 |
| 1993 | $5,913,001,064 | $12,650,210,449 | $125,742,229 | $122,587,663 |
| 1994 | $6,330,627,926 | $12,618,584,749 | $131,338,415 | $125,284,594 |
| 1995 | $6,651,180,851 | $13,114,494,169 | $103,695,237 | $127,790,288 |
| 1996 | $6,938,166,755 | $13,653,500,708 | $135,188,166 | $129,707,144 |
| 1997 | $7,219,407,713 | $14,075,803,380 | $91,920,274 | $130,999,443 |
| 1998 | $7,031,309,043 | $14,750,034,868 | $72,285,404 | $134,274,413 |
| 1999 | $7,528,469,149 | $15,384,286,109 | $77,302,212 | $137,631,282 |
| 2000 | $9,062,898,936 | $16,199,663,949 | $76,198,395 | $138,248,377 |
| 2001 | $8,976,196,809 | $16,603,189,277 | $75,951,133 | $142,484,975 |
| 2002 | $9,593,510,638 | $17,159,155,483 | $85,171,074 | $147,272,738 |
| 2003 | $11,074,813,830 | $18,239,571,634 | $102,085,769 | $159,483,886 |
| 2004 | $13,150,159,574 | $19,512,869,154 | $114,582,284 | $165,126,276 |
| 2005 | $15,968,723,404 | $20,833,694,756 | $136,450,662 | $176,048,759 |
| 2006 | $18,504,760,638 | $22,181,009,695 | $142,775,104 | $191,657,435 |
| 2007 | $21,730,000,000 | $24,020,694,053 | $149,146,919 | $198,636,586 |
| 2008 | $25,710,904,255 | $25,520,789,027 | $188,021,165 | $211,009,232 |
| 2009 | $22,938,218,085 | $26,168,987,899 | $200,668,065 | $217,977,601 |
| 2010 | $26,805,984,043 | $27,303,230,073 | $190,021,192 | $221,134,909 |
| 2011 | $29,914,680,851 | $27,829,679,464 | $226,455,001 | $225,556,351 |
| 2012 | $31,963,404,255 | $28,888,050,242 | $229,371,348 | $232,194,345 |
| 2013 | $33,823,324,468 | $30,416,985,616 | $267,041,748 | $244,081,947 |
| 2014 | $34,772,526,596 | $31,727,610,008 | $293,119,143 | $256,057,121 |
| 2015 | $32,523,297,872 | $32,523,297,872 | $259,999,643 | $259,999,643 |
| 2016 | $33,884,680,851 | $33,764,059,499 | $292,267,272 | $273,459,369 |
| 2017 | $37,204,813,830 | $35,436,675,411 | $322,002,845 | $284,706,697 |
| 2018 | $39,567,978,723 | $36,164,044,588 | $383,717,328 | $297,171,521 |
| 2019 | $40,446,808,511 | $36,906,448,211 | $412,976,083 | $303,157,496 |
| 2020 | $35,837,632,979 | $34,724,774,104 | $471,229,485 | $311,114,955 |
| 2021 | $40,840,212,766 | $36,235,315,986 | $524,402,456 | $317,023,958 |
| 2022 | $46,458,191,489 | $38,474,716,945 | $540,809,499 | $317,558,772 |
| 2023 | $46,192,260,638 | $39,966,811,156 | $678,976,265 | $318,740,894 |
| 2024 | $47,736,702,128 | $41,172,709,123 | $764,274,043 | $321,609,564 |
Economic indicators
|
Bahrain
|
Sao Tome
|
|
|---|---|---|
| Gross domestic product |
$47.7B
2024 |
$764M
2024 |
| GDP rank |
95/197
2024 |
189/197
2024 |
| GDP growth |
3.34%
2023-2024 |
12.6%
2023-2024 |
| GDP per capita |
$30,048
2024 |
$3,245
2024 |
| GDP per capita rank |
41/197
2024 |
138/197
2024 |
| GDP per capita, PPP |
$67,211
2024 |
$6,230
2024 |
| Government debt |
$64B
2024 |
$332M
2024 |
| Debt-to-GDP ratio |
141.4%
2025 |
37.3%
2025 |
| Government debt per person |
$40,267
2024 |
$1,410
2024 |
| Government debt per person rank |
13/185
2024 |
133/185
2024 |
| Average annual personal income after taxes |
$20,364
2025 |
$2,715
2025 |
| Market capitalization of domestic companies |
$20.4B
2024 |
n/a |
| Income share by richest 10% | n/a |
32.8%
2017 |
| Income share by poorest 10% | n/a |
2.6%
2017 |
| Government expenditure, % of GDP |
29.6%
2025 |
24.5%
2025 |
| Consumer prices inflation |
0.92%
2023-2024 |
9.7%
2024-2025 |
| Central bank interest rate |
4.75%
2025 |
n/a |
| Unemployment rate |
1.2%
2012 |
8.81%
2017 |
| Population |
1650128
|
244055
|
GDP per capita in Bahrain vs Sao Tome and Principe
Bahrain's GDP per capita is $30,048, ranking 41/197, compared to $3,245 in Sao Tome and Principe, ranking 138/197. Adjusted for purchasing power (GDP per capita PPP), Bahrain ranks 26th at $67,211, while Sao Tome and Principe ranks 151st at $6,230.
| Year | Current $ | |||
|---|---|---|---|---|
|
Bahrain
|
Sao Tome
|
|||
| GDP per capita | GDP per capita, PPP | GDP per capita | GDP per capita, PPP | |
| 1970 | $1,742 | - | $479 | - |
| 1971 | $1,830 | - | $470 | - |
| 1972 | $2,206 | - | $511 | - |
| 1973 | $2,981 | - | $676 | - |
| 1974 | $3,874 | - | $683 | - |
| 1975 | $3,880 | - | $693 | - |
| 1976 | $5,310 | - | $585 | - |
| 1977 | $6,358 | - | $539 | - |
| 1978 | $6,926 | - | $587 | - |
| 1979 | $7,891 | - | $683 | - |
| 1980 | $9,733 | - | $829 | - |
| 1981 | $10,557 | - | $830 | - |
| 1982 | $10,712 | - | $783 | - |
| 1983 | $10,599 | - | $720 | - |
| 1984 | $10,697 | - | $735 | - |
| 1985 | $9,649 | - | $761 | - |
| 1986 | $7,777 | - | $1,043 | - |
| 1987 | $8,333 | - | $1,018 | - |
| 1988 | $8,772 | - | $847 | - |
| 1989 | $8,833 | - | $821 | - |
| 1990 | $9,343 | $26,902 | $970 | $1,504 |
| 1991 | $10,434 | $31,657 | $855 | $1,540 |
| 1992 | $10,460 | $33,648 | $740 | $1,556 |
| 1993 | $11,152 | $37,870 | $964 | $1,581 |
| 1994 | $11,629 | $37,579 | $990 | $1,623 |
| 1995 | $11,901 | $38,839 | $769 | $1,663 |
| 1996 | $12,092 | $40,106 | $987 | $1,693 |
| 1997 | $12,255 | $40,965 | $662 | $1,714 |
| 1998 | $11,625 | $42,281 | $514 | $1,754 |
| 1999 | $12,123 | $43,561 | $543 | $1,802 |
| 2000 | $14,214 | $45,688 | $529 | $1,830 |
| 2001 | $13,573 | $46,162 | $519 | $1,898 |
| 2002 | $13,501 | $45,091 | $568 | $1,945 |
| 2003 | $14,486 | $45,427 | $664 | $2,094 |
| 2004 | $15,964 | $46,317 | $727 | $2,171 |
| 2005 | $17,966 | $47,268 | $844 | $2,329 |
| 2006 | $19,267 | $48,009 | $862 | $2,551 |
| 2007 | $20,908 | $49,347 | $879 | $2,650 |
| 2008 | $23,299 | $50,330 | $1,082 | $2,802 |
| 2009 | $19,465 | $48,626 | $1,128 | $2,846 |
| 2010 | $21,819 | $49,255 | $1,045 | $2,859 |
| 2011 | $25,033 | $52,677 | $1,220 | $2,914 |
| 2012 | $26,439 | $56,713 | $1,211 | $2,695 |
| 2013 | $26,990 | $56,310 | $1,383 | $2,946 |
| 2014 | $26,452 | $54,299 | $1,490 | $3,233 |
| 2015 | $23,734 | $48,034 | $1,298 | $3,172 |
| 2016 | $23,800 | $47,429 | $1,435 | $3,320 |
| 2017 | $24,785 | $50,185 | $1,556 | $3,436 |
| 2018 | $26,324 | $51,993 | $1,826 | $3,941 |
| 2019 | $27,260 | $56,600 | $1,935 | $4,655 |
| 2020 | $24,343 | $53,436 | $2,167 | $5,145 |
| 2021 | $27,148 | $54,955 | $2,363 | $5,733 |
| 2022 | $30,471 | $61,678 | $2,390 | $6,034 |
| 2023 | $29,290 | $64,171 | $2,941 | $6,150 |
| 2024 | $30,048 | $67,211 | $3,245 | $6,230 |
Spending and national debt comparison
In 2024, Bahrain's government spending was $14.4B, accounting for 29.6% of its GDP, while Sao Tome and Principe's spent $148M, or 24.5% of GDP.
Debt-to-GDP ratio is 141.4% in Bahrain and 37.3% in Sao Tome and Principe, ranking 8/185 and 141/185, respectively.
| Year | % of GDP | |||
|---|---|---|---|---|
|
Bahrain
|
Sao Tome
|
|||
| Government spending | Government debt | Government spending | Government debt | |
| 1990 | 32.4% | 7.24% | - | - |
| 1991 | 28.5% | 6.71% | - | - |
| 1992 | 29.4% | 6.45% | - | - |
| 1993 | 26.7% | 5.95% | - | - |
| 1994 | 26.1% | 5.62% | - | - |
| 1995 | 25.1% | 13.6% | - | - |
| 1996 | 22.7% | 13.1% | - | - |
| 1997 | 31% | 14.8% | - | - |
| 1998 | 25.7% | 20% | - | - |
| 1999 | 27.1% | 24.7% | - | - |
| 2000 | 22.2% | 24.7% | 10.7% | - |
| 2001 | 26.5% | 25% | 52.8% | 418% |
| 2002 | 30.6% | 27.2% | 44.3% | 367% |
| 2003 | 28.1% | 31.1% | 51.9% | 329% |
| 2004 | 25% | 28.2% | 60.6% | 354% |
| 2005 | 23.9% | 23.2% | 43.7% | 334% |
| 2006 | 23.1% | 19.4% | 32.5% | 283.2% |
| 2007 | 22.4% | 15.7% | 38.9% | 110.1% |
| 2008 | 22.7% | 12.1% | 30.4% | 60.7% |
| 2009 | 24.6% | 20.5% | 48.6% | 70.3% |
| 2010 | 31.1% | 28.8% | 51.7% | 83% |
| 2011 | 30.2% | 31.6% | 53.4% | 86% |
| 2012 | 31.1% | 34.8% | 50.5% | 86.3% |
| 2013 | 32% | 42.3% | 35.5% | 77.1% |
| 2014 | 27.3% | 42.6% | 36% | 67.4% |
| 2015 | 34.8% | 63.2% | 41.6% | 84.3% |
| 2016 | 33.3% | 77.4% | 38.3% | 81.7% |
| 2017 | 30.7% | 84% | 31.9% | 74.7% |
| 2018 | 32.1% | 90.4% | 28% | 71.5% |
| 2019 | 31.2% | 97.1% | 22.8% | 76.4% |
| 2020 | 34.6% | 125.7% | 23.2% | 70.8% |
| 2021 | 30.6% | 122.3% | 25.6% | 59.2% |
| 2022 | 27.5% | 111.6% | 27.7% | 55.1% |
| 2023 | 27.9% | 123% | 24.3% | 44.7% |
| 2024 | 30.2% | 134% | 19.3% | 43.5% |
| 2025 | 29.6% | 141.4% | 24.5% | 37.3% |
Government deficit by year
In 2024, Bahrain's government deficit, the difference between spending and revenue, was -$5.11B, equivalent to -10.7% of GDP. This compares to Sao Tome and Principe's surplus of $7.16M, or 0.94% of GDP.
Over the past 25 years, Bahrain recorded a fiscal deficit in 18 of those years, while Sao Tome and Principe ran a deficit in 17 years. On average, Bahrain posted an annual deficit equal to -5.71% of GDP, compared to surplus of +3.63% of GDP for Sao Tome and Principe.
| Year | Deficit/surplus, % of GDP | |
|---|---|---|
|
Bahrain
|
Sao Tome
|
|
| 1990 | -6.79% | - |
| 1991 | -3.47% | - |
| 1992 | -5.41% | - |
| 1993 | -2.77% | - |
| 1994 | -5.18% | - |
| 1995 | -3.99% | - |
| 1996 | 0.24% | - |
| 1997 | -6.39% | - |
| 1998 | -5.49% | - |
| 1999 | -4.85% | - |
| 2000 | 7.33% | 51.5% |
| 2001 | 0.7% | -13.5% |
| 2002 | -3.27% | -10.4% |
| 2003 | -1.7% | -15.9% |
| 2004 | 0.24% | -25.1% |
| 2005 | 2.8% | 26.8% |
| 2006 | 2.24% | 18% |
| 2007 | 1.52% | 125.1% |
| 2008 | 4.08% | 13.6% |
| 2009 | -5.36% | -18% |
| 2010 | -9.29% | -12.1% |
| 2011 | -4.9% | -13% |
| 2012 | -5.77% | -12.3% |
| 2013 | -8.55% | 2.13% |
| 2014 | -3.32% | -6.27% |
| 2015 | -17.5% | -7.6% |
| 2016 | -16.6% | -5.01% |
| 2017 | -13.4% | -3.11% |
| 2018 | -11.3% | -2.02% |
| 2019 | -8.57% | -0.07% |
| 2020 | -17.3% | 2.94% |
| 2021 | -10.6% | -1.52% |
| 2022 | -5.15% | -2.24% |
| 2023 | -8.46% | -2.17% |
| 2024 | -10.7% | 0.94% |
| 2025 | -10.4% | 2.56% |
Inflation comparison by year
Over the past 29 years, Bahrain has recorded an average annual inflation rate of 1.28%, compared with 16.7% in Sao Tome and Principe. In 2024, inflation was 0.92% in Bahrain and 9.7% in Sao Tome and Principe.
| Year | Inflation | ||
|---|---|---|---|
|
Bahrain
|
Sao Tome
|
Bahrain
|
Sao Tome
|
| 1996 | -0.45% | 42% | |
| 1997 | 2.43% | 69% | |
| 1998 | -0.37% | 42.1% | |
| 1999 | -1.29% | 11% | |
| 2000 | -0.7% | 11% | |
| 2001 | -1.21% | 9.2% | |
| 2002 | -0.5% | 10.1% | |
| 2003 | 1.59% | 9.8% | |
| 2004 | 2.35% | 13.3% | |
| 2005 | 2.59% | 17.2% | |
| 2006 | 2.01% | 23.1% | |
| 2007 | 3.26% | 18.6% | |
| 2008 | 3.53% | 32% | |
| 2009 | 2.8% | 17% | |
| 2010 | 1.96% | 13.3% | |
| 2011 | -0.4% | 14.3% | |
| 2012 | 2.76% | 10.6% | |
| 2013 | 3.3% | 8.1% | |
| 2014 | 2.65% | 7% | |
| 2015 | 1.85% | 6.1% | |
| 2016 | 2.79% | 5.4% | |
| 2017 | 1.39% | 5.7% | |
| 2018 | 2.09% | 7.9% | |
| 2019 | 1.01% | 7.7% | |
| 2020 | -2.32% | 9.8% | |
| 2021 | -0.61% | 8.1% | |
| 2022 | 3.63% | 18% | |
| 2023 | 0.07% | 21.2% | |
| 2024 | 0.92% | 14.4% | |
| 2025 | - | 9.7% | |
Balance of trade
|
Bahrain
|
Sao Tome
|
|
|---|---|---|
Current account balance
|
$2.28B
2024 |
-$79.4M
2022 |
| Current account balance ranking |
42/189
2024 |
85/189
2022 |
| Current account balance, % of GDP |
+4.78%
2024 |
-14.7%
2022 |
| Goods imports |
$20.7B
2024 |
$165M
2022 |
| Goods exports |
$24.3B
2024 |
$21.9M
2022 |
| Service imports |
$12.4B
2024 |
$54.6M
2022 |
| Service exports |
$17B
2024 |
$75.1M
2022 |
| Imports of goods and services, % of GDP |
70.1%
2023 |
n/a |
| Exports of goods and services, % of GDP |
87.4%
2023 |
10%
2025 |
Economic freedom indices
The indices of economic freedom below are issued by the Heritage Foundation. Higher scores indicate stronger economic health.
|
Bahrain
|
Sao Tome
|
|
|---|---|---|
| Economic freedom | 65.6 | 60.4 |
| Economic freedom ranking | 61/197 | 93/197 |
| Property rights | 65.4 | 53 |
| Government integrity | 39.8 | 47.7 |
| Judicial effectiveness | 30.2 | 60.6 |
| Tax burden | 99.9 | 88.6 |
| Government spending | 74.3 | 81.5 |
| Fiscal health | 0 | 93.6 |
| Business freedom | 76.5 | 52.8 |
| Labor freedom | 55.3 | 45.2 |
| Monetary freedom | 88.7 | 57.2 |
| Trade freedom | 86.6 | 65 |
| Investment freedom | 90 | 50 |
| Financial freedom | 80 | 30 |
Economic freedom by year comparison
The Economic Freedom Index for Bahrain is 65.6, ranking 61/197, compared to 60.4 for Sao Tome and Principe, ranking 93/197. The chart below displays a comparison of annual changes in economic freedom indexes.
| Year | Economic freedom index | |
|---|---|---|
|
Bahrain
|
Sao Tome
|
|
| 1995 | 76.2 | - |
| 1996 | 76.4 | - |
| 1997 | 76.1 | - |
| 1998 | 75.6 | - |
| 1999 | 75.2 | - |
| 2000 | 75.7 | - |
| 2001 | 75.9 | - |
| 2002 | 75.6 | - |
| 2003 | 76.3 | - |
| 2004 | 75.1 | - |
| 2005 | 71.2 | - |
| 2006 | 71.6 | - |
| 2007 | 71.2 | - |
| 2008 | 72.2 | - |
| 2009 | 74.8 | 43.8 |
| 2010 | 76.3 | 48.8 |
| 2011 | 77.7 | 49.5 |
| 2012 | 75.2 | 50.2 |
| 2013 | 75.5 | 48 |
| 2014 | 75.1 | 48.8 |
| 2015 | 73.4 | 53.3 |
| 2016 | 74.3 | 56.7 |
| 2017 | 68.5 | 55.4 |
| 2018 | 67.7 | 53.6 |
| 2019 | 66.4 | 54 |
| 2020 | 66.3 | 56.2 |
| 2021 | 69.9 | 55.9 |
| 2022 | 62 | 60.3 |
| 2023 | 62.5 | 61.5 |
| 2024 | 63.4 | 60.5 |
| 2025 | 65.6 | 60.4 |
More economic indicators
|
Bahrain
|
Sao Tome
|
|
|---|---|---|
| Services, % of GDP |
51.9%
2023 |
76.6%
2024 |
| Industry, % of GDP |
43.4%
2023 |
2.91%
2024 |
| Agriculture, forestry, and fishing, % of GDP |
0.25%
2023 |
12.8%
2024 |
|
GNI, Atlas method
|
$45.8B
2024 |
$653M
2024 |
| GNI per capita, PPP |
$63,610
2024 |
$6,220
2024 |
| Total reserves including gold |
$4.95B
2024 |
$46.2M
2023 |
| Total reserves ranking |
102/177
2024 |
176/177
2023 |
|
Net foreign direct investment
|
-$2.43B
2024 |
-$127M
2022 |
|
Net inflows of foreign direct investment
|
$2.7B
2024 |
$21.9M
2024 |
|
Net outflows of foreign direct investment
|
$275M
2024 |
$1.8M
2024 |
|
Servicing debt to the IMF, % of GNI
|
n/a |
0.94%
2023 |
| Poverty at national poverty lines | n/a |
66.2%
2020 |
|
Gross capital formation, % of GDP
|
29.3%
2023 |
n/a |
GDP per capita map
GDP per capita
Compare countries by 7 more topics
Relevant pages:
By topic
vs
comparisons:
Economy comparisons
The current account balance is the sum of net trade in goods and services, net earnings from cross-border investments, and net transfer payments. It reflects a country's economic transactions with the rest of the world and is a fundamental component of the balance of payments. A surplus indicates that a country exports more than it imports, while a deficit shows the opposite.
Gross National Income (GNI) measures a country's total income. It encompasses income earned by residents, businesses, and foreign sources, defined as employee compensation and investment profits. GNI adds product taxes not included elsewhere and subtracts subsidies. It accounts for income from residents working abroad but excludes earnings from foreigners within the country.
A negative value for Net Foreign Direct Investment indicates a country is a net receiver of investments, as foreign inflows exceed outflows after Balance of Payments adjustments. A positive value indicates a net provider, with outflows exceeding inflows. Inflows are credits (increasing foreign claims on domestic assets), while outflows are debits (increasing domestic assets abroad).
Foreign direct investment (FDI, net inflows) shows how much capital foreign investors bring into a country after accounting for any funds that flow back in the opposite direction. It represents the net value of overseas companies establishing, expanding, or financing businesses in the reporting country. A positive number means more capital entered the country than was withdrawn, while a negative number means foreign investors pulled out more than they invested.
Foreign direct investment (FDI, net outflows) shows how much capital residents of a country invest abroad after accounting for any funds that flow back in the opposite direction. It represents the net value of domestic companies establishing, expanding, or financing businesses in other countries. A positive number means more capital was invested abroad than withdrawn, while a negative number means residents pulled back more than they invested.
Principal and interest payments to the IMF in currency, goods, or services on long-term debt expressed as a share of GNI.
Formerly gross domestic investment, gross capital formation measures the share of a country’s economic output invested in fixed assets, including buildings, machinery, and infrastructure. It indicates how much of the economy is devoted to building productive capacity.