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Economy of Central African Republic vs Netherlands compared: GDP & Debt

Updated on by Georank

The Central African Republic has a GDP of $3.07B compared to $1.33T for the Netherlands, ranking 171/197 and 18/197 by economy size, respectively.

The Central African Republic has $1.9B in government debt (61.8% of GDP), compared to $578B (43.3% of GDP) in the Netherlands.

Central African Republic vs Netherlands GDP by year

Central African Republic
Netherlands
1x
Year GDP, current $
CAR Netherlands
2025 $3,066,109,226 $1,332,767,651,100
2024 $2,751,494,281 $1,213,936,238,063
2023 $2,555,492,086 $1,135,475,867,551
2022 $2,382,618,615 $1,046,540,797,549
2021 $2,516,498,412 $1,054,472,123,450
2020 $2,326,720,900 $932,560,861,701
2019 $2,221,301,351 $928,903,005,576
2018 $2,220,979,146 $929,733,599,797
2017 $2,072,349,973 $848,233,537,846
2016 $1,825,018,145 $797,163,949,290
2015 $1,695,825,714 $775,743,675,303
2014 $1,894,813,389 $901,556,501,756
2013 $1,691,544,110 $883,951,539,007
2012 $2,510,126,512 $845,689,017,066
2011 $2,437,982,705 $913,140,741,333
2010 $2,142,591,540 $852,464,982,433
2009 $2,067,381,665 $878,954,223,140
2008 $1,993,407,888 $957,901,566,041
2007 $1,699,811,295 $853,499,460,873
2006 $1,461,859,762 $737,593,995,289
2005 $1,337,894,379 $688,133,699,636
2004 $1,272,360,517 $661,224,886,143
2003 $1,142,315,523 $582,435,617,082
2002 $996,068,145 $475,529,972,123
2001 $932,648,605 $432,536,219,669
2000 $916,777,283 $417,649,282,154
1999 $999,477,511 $447,778,514,140
1998 $967,338,390 $438,612,530,549
1997 $937,741,513 $417,506,211,882
1996 $1,007,791,127 $451,372,549,020
1995 $1,115,389,674 $452,967,334,614
1994 $851,174,357 $379,688,232,232
1993 $1,278,781,262 $354,070,495,966
1992 $1,411,917,553 $363,497,050,125
1991 $1,377,374,987 $327,982,316,124
1990 $1,440,711,459 $318,799,003,994
1989 $1,233,930,281 $258,716,904,292
1988 $1,264,899,288 $262,295,966,105
1987 $1,200,991,978 $245,406,949,521
1986 $1,122,265,013 $201,157,708,221
1985 $864,849,836 $144,057,523,222
1984 $637,820,670 $144,124,462,912
1983 $658,679,333 $153,671,294,109
1982 $748,312,391 $158,712,765,536
1981 $694,803,623 $164,375,775,854
1980 $797,048,199 $195,439,301,707
1979 $700,764,748 $179,933,827,310
1978 $610,578,632 $156,089,077,205
1977 $507,298,148 $127,203,923,857
1976 $451,152,461 $109,329,386,564
1975 $378,660,016 $100,397,061,694
1974 $281,398,706 $87,371,810,804
1973 $271,183,082 $71,946,639,603
1972 $230,317,883 $54,787,070,173
1971 $201,450,800 $44,644,730,576
1970 $189,106,529 $38,220,884,519
1969 $188,039,210 $34,086,038,090
1968 $191,767,442 $30,097,635,751
1967 $163,820,514 $27,143,828,099
1966 $157,930,018 $24,741,480,717
1965 $150,574,795 $22,721,869,808
1964 $142,025,079 $20,232,048,553
1963 $129,379,124 $17,193,744,109
1962 $124,482,774 $15,847,582,341
1961 $123,134,583 $14,599,836,396
1960 $112,155,598 $13,282,979,015

Data sources: World Bank | Economy & Growth (1960–2025, retrieved 2026-07-08).

GeoRank.org/economy/central-african-republic/netherlands | CC BY

GDP per capita in Central African Republic vs Netherlands by year

Central African Republic
GDP per capita

GDP per capita, PPP
Netherlands
GDP per capita

GDP per capita, PPP
1x
Year Current $
CAR Netherlands
GDP per capita GDP per capita, PPP GDP per capita GDP per capita, PPP
2025 $556 - $73,684 -
2024 $516 $1,263 $67,465 $86,174
2023 $496 $1,257 $63,516 $81,729
2022 $467 $1,218 $59,123 $78,630
2021 $492 $1,129 $60,142 $68,574
2020 $463 $1,066 $53,468 $62,597
2019 $449 $985 $53,555 $62,345
2018 $455 $906 $53,955 $58,819
2017 $432 $884 $49,514 $56,038
2016 $387 $826 $46,809 $53,162
2015 $366 $769 $45,794 $50,957
2014 $410 $699 $53,457 $49,751
2013 $364 $710 $52,602 $49,622
2012 $544 $1,062 $50,474 $47,653
2011 $534 $980 $54,702 $47,004
2010 $477 $936 $51,306 $45,301
2009 $456 $877 $53,172 $44,959
2008 $437 $798 $58,247 $46,714
2007 $381 $783 $52,101 $44,203
2006 $334 $743 $45,124 $41,208
2005 $312 $702 $42,165 $37,778
2004 $303 $690 $40,611 $35,961
2003 $278.4 $648 $35,897 $34,286
2002 $248.6 $688 $29,447 $34,568
2001 $238 $668 $26,956 $33,259
2000 $239.2 $640 $26,225 $31,895
1999 $268 $660 $28,319 $29,316
1998 $266.6 $645 $27,924 $27,749
1997 $265.5 $626 $26,745 $26,062
1996 $293.3 $601 $29,064 $24,564
1995 $333 $631 $29,301 $23,480
1994 $261.3 $592 $24,683 $22,414
1993 $405 $570 $23,156 $21,443
1992 $462 $573 $23,939 $20,831
1991 $465 $618 $21,764 $20,177
1990 $502 $620 $21,322 $19,203
1989 $443 - $17,423 -
1988 $466 - $17,771 -
1987 $450 - $16,734 -
1986 $426 - $13,804 -
1985 $333 - $9,941 -
1984 $248.3 - $9,992 -
1983 $259.6 - $10,696 -
1982 $298.4 - $11,089 -
1981 $280.3 - $11,537 -
1980 $325 - $13,812 -
1979 $289.1 - $12,817 -
1978 $254.6 - $11,196 -
1977 $213.8 - $9,180 -
1976 $192.1 - $7,937 -
1975 $163.6 - $7,346 -
1974 $124 - $6,450 -
1973 $121.8 - $5,353 -
1972 $105.5 - $4,110 -
1971 $94.1 - $3,384 -
1970 $90.2 - $2,931 -
1969 $91.7 - $2,647 -
1968 $95.6 - $2,364 -
1967 $83.6 - $2,155 -
1966 $82.3 - $1,986 -
1965 $80.2 - $1,848 -
1964 $77.2 - $1,668 -
1963 $71.8 - $1,437 -
1962 $70.4 - $1,342 -
1961 $71 - $1,254 -
1960 $65.9 - $1,156 -

Data sources: World Bank | Economy & Growth (1960–2025, retrieved 2026-07-08).

GeoRank.org/economy/central-african-republic/netherlands | CC BY

The Central African Republic's GDP per capita is $556, ranking 195/197, compared to $73,684 in the Netherlands, ranking 12/197. Adjusted for purchasing power (GDP per capita PPP), the Central African Republic ranks 195th at $1,263, while the Netherlands ranks 11th at $86,174.

Economic indicators

CAR Netherlands
Gross domestic product
$3.07B
2025
$1.33T
2025
GDP rank
171/197
2025
18/197
2025
GDP growth
4.5%
2024-2025
1.78%
2024-2025
GDP per capita
$556
2025
$73,684
2025
GDP per capita rank
195/197
2025
12/197
2025
GDP per capita, PPP
$1,263
2024
$86,174
2024
GDP per capita PPP rank
195/197
2024
11/197
2024
Government debt
$1.9B
2025
$578B
2025
Debt-to-GDP ratio
61.8%
2025
43.3%
2025
Government debt per person
$344
2025
$31,942
2025
Government debt per person rank
176/185
2025
23/185
2025
Average annual personal income after taxes
$1,242
2026
$46,674
2026
Market capitalization of domestic companies n/a
$1.1T
2017
Number of millionaires n/a
1,294,000
2026
Number of billionaires n/a
13
2026
Income share by richest 10%
33.1%
2021
21.4%
2021
Income share by poorest 10%
2.1%
2021
3.6%
2021
Government expenditure, % of GDP
21.1%
2025
45.1%
2025
Consumer prices inflation
1%
2024-2025
3.26%
2024-2025
Unemployment rate
6.9%
2017
3.9%
2025
Population
5798457
18243998

Spending and national debt comparison by year

Central African Republic
Spending

Debt
Netherlands
Spending

Debt
1x
Year % of GDP
CAR Netherlands
Government spending Government debt Government spending Government debt
2025 21.1% 61.8% 45.1% 43.3%
2024 19.4% 59.9% 44.4% 43.7%
2023 17.5% 55.6% 44% 45.8%
2022 17.1% 48.9% 43.3% 48.4%
2021 19% 46.3% 45.9% 50.5%
2020 24% 42.4% 47.8% 53.4%
2019 15.8% 44.9% 42.1% 47.7%
2018 16.8% 47.9% 42.4% 51.6%
2017 13.1% 47.4% 42.8% 56%
2016 11.1% 49.3% 43.9% 60.9%
2015 12.7% 54.4% 45.3% 63.8%
2014 16.7% 57.5% 46.7% 67.2%
2013 13.4% 51.8% 47.5% 67.2%
2012 14.7% 31.5% 47.6% 65.7%
2011 14.2% 19.7% 47.8% 61.2%
2010 17.3% 19.9% 48.9% 58.9%
2009 16% 20.3% 48.4% 56.3%
2008 16% 35.8% 44.3% 54.4%
2007 12.9% 47.9% 43.3% 42.7%
2006 13.4% 46.7% 44% 45%
2005 16.2% 103% 43.4% 49.6%
2004 13.1% 99.7% 44.7% 50.1%
2003 12.3% 95.9% 45.8% 49.8%
2002 16.7% 98.5% 44.8% 48.7%
2001 14.1% 103.1% 44.1% 49.4%
2000 17.2% 94.7% 43.2% 52.2%
1999 18.2% 84.2% 44.3% 58.6%
1998 18.1% 85.3% 44.6% 62.7%
1997 14.5% 96.1% 45.7% 65.7%
1996 11.7% 93% 47.3% 71.2%
1995 20.6% 83.8% 53.9% 73%
1994 22.4% 103.4% 49.4% 73.5%
1993 20.6% 68.2% 50.9% 76.7%
1992 23.1% 57.4% 50.2% 75.6%
1991 22.6% 55.8% 49.6% 74.8%
1990 22% 44.6% 48.8% 75%
1989 19.6% 50.9% 54.5% 73.7%
1988 21.4% 48.8% 56.4% 73.7%
1987 - - 58.5% 71.3%
1986 - - 57% 68.9%
1985 - - 57.3% 67.1%
1984 - - 58.1% 61.9%
1983 - - 59.1% 58.4%
1982 - - 59.1% 52.4%
1981 - - 56.8% 46.9%
1980 - - 55.2% 43.6%
1979 - - 53.7% 39.5%
1978 - - 52.3% 38.1%
1977 - - 50.6% 34.9%
1976 - - 50.8% 35.2%
1975 - - 50.8% 36.1%
1974 - - 46.4% 36.3%
1973 - - 44.6% 38.1%
1972 - - 44.9% 41.3%
1971 - - 44.6% 43.7%
1970 - - 43.2% 46.1%
1969 - - 42.1% 48.2%
1968 - - 25.4% 54.4%
1967 - - 24.1% 55%
1966 - - 24.4% 55.6%
1965 - - 23.4% 55.8%
1964 - - 22.3% 57.1%
1963 - - 21.9% 61.7%
1962 - - 22.1% 63.8%
1961 - - 22.2% 65.9%
1960 - - 20.4% 66.7%

Data sources: International Monetary Fund (IMF) | Fiscal Monitor (1990–2025, retrieved 2026-07-08); International Monetary Fund (IMF) | Public Finances in Modern History (1960–1996, retrieved 2026-07-08).

GeoRank.org/economy/central-african-republic/netherlands | CC BY

In 2025, the Central African Republic's government spending was $646M, accounting for 21.1% of its GDP, while the Netherlands spent $602B, or 45.1% of GDP.

Debt-to-GDP ratio is 61.8% in the Central African Republic and 43.3% in the Netherlands, ranking 72/185 and 121/185, respectively.

Government deficit by year

Deficit/surplus
Central African Republic

Netherlands
1x
Year Deficit/surplus, % of GDP
CAR Netherlands
2025 -5.49% -1.84%
2024 -5.03% -0.94%
2023 -3.42% -0.37%
2022 -5.13% 0.002%
2021 -5.71% -2.26%
2020 -3.23% -3.72%
2019 1.33% 1.91%
2018 -0.93% 1.49%
2017 -1% 1.35%
2016 1.18% 0.23%
2015 -0.53% -1.84%
2014 -3.02% -2.17%
2013 -2.3% -2.87%
2012 -0.78% -3.83%
2011 -2.15% -4.42%
2010 -1.35% -5.3%
2009 -0.54% -5.06%
2008 -1.23% -0.06%
2007 1.04% -0.16%
2006 8.58% 0.04%
2005 -4.37% -0.51%
2004 -1.74% -1.82%
2003 -3.06% -3.19%
2002 -1.19% -2.23%
2001 -0.88% -0.47%
2000 -2.01% 1.14%
1999 -0.5% 0.28%
1998 0.001% -1.34%
1997 -1.57% -1.6%
1996 -1.06% -1.91%
1995 -4.84% -8.72%
1994 -7.57% -3.53%
1993 -5.66% -3.13%
1992 -7.33% -3.12%
1991 -8% -2.05%
1990 -6.6% -4.08%
1989 -3.25% -5%
1988 -3.72% -4.23%
1987 - -5.39%
1986 - -4.62%
1985 - -3.6%
1984 - -5.25%
1983 - -5.47%
1982 - -6.17%
1981 - -4.92%
1980 - -3.95%
1979 - -2.46%
1978 - -2.09%
1977 - -0.75%
1976 - -2.02%
1975 - -2.82%
1974 - -0.26%
1973 - 0.54%
1972 - -0.7%
1971 - -1.58%
1970 - -1.52%
1969 - -1.14%
1968 - -3.06%
1967 - -1.97%
1966 - -2.37%
1965 - -1.15%
1964 - -1.2%
1963 - -0.54%
1962 - -1.38%
1961 - -0.38%
1960 - 0.9%
1959 - -0.74%
1958 - -0.89%
1957 - 0.3%
1956 - -0.83%
1955 - -0.25%
1954 - 0.76%
1953 - -2.95%
1952 - 2.19%
1951 - 2.13%
1950 - 0.81%
1949 - 2.3%
1948 - -
1947 - -
1946 - -
1945 - -
1944 - -
1943 - -
1942 - -
1941 - -
1940 - -
1939 - -3.19%
1938 - -0.37%
1937 - 0.02%
1936 - -0.41%
1935 - -0.69%
1934 - -0.92%
1933 - -2.55%
1932 - -1.97%
1931 - -1.66%
1930 - -0.55%
1929 - -1.16%
1928 - -0.62%
1927 - -0.33%
1926 - -0.78%
1925 - -2.04%
1924 - -3.37%
1923 - -2.62%
1922 - -
1921 - -
1920 - -
1919 - -
1918 - -
1917 - -
1916 - -
1915 - -
1914 - -
1913 - -0.45%
1912 - -0.47%
1911 - -0.13%
1910 - -0.93%
1909 - -0.34%
1908 - -0.57%
1907 - 0.03%
1906 - 0.16%
1905 - 0.1%
1904 - -0.72%
1903 - 0.09%
1902 - -0.14%
1901 - 0.03%
1900 - 0.06%
1899 - -0.13%
1898 - -0.48%
1897 - -0.45%
1896 - 0.08%
1895 - -0.06%
1894 - 0.12%
1893 - -0.76%
1892 - -1.72%
1891 - -0.06%
1890 - -0.06%
1889 - 0.04%
1888 - -0.31%
1887 - -0.37%
1886 - -0.08%
1885 - -0.55%
1884 - 0%
1883 - -2.1%
1882 - -1.11%
1881 - -1.06%
1880 - 0.21%

Data sources: International Monetary Fund (IMF) | Public Finances in Modern History (1880–1989, retrieved 2026-07-08); International Monetary Fund (IMF) | Fiscal Monitor (1990–2025, retrieved 2026-07-08).

GeoRank.org/economy/central-african-republic/netherlands | CC BY

In 2025, the Central African Republic's government deficit, the difference between spending and revenue, was $168M, equivalent to 5.49% of GDP. This compares to the Netherlands' deficit of $24.5B, or 1.84% of GDP.

Over the past 38 years, the Central African Republic recorded a fiscal deficit in 33 of those years, while the Netherlands ran a deficit in 30 years. On average, the Central African Republic posted an annual deficit equal to 2.45% of GDP, compared to deficit of 1.98% of GDP for the Netherlands.

Inflation comparison by year

Inflation
Central African Republic

Netherlands
1x
Year Consumer prices inflation
CAR Netherlands
2025 1% 3.26%
2024 1.5% 3.35%
2023 3% 3.84%
2022 5.6% 10%
2021 4.3% 2.68%
2020 0.9% 1.27%
2019 2.8% 2.63%
2018 1.6% 1.7%
2017 4.2% 1.38%
2016 4.9% 0.32%
2015 1.4% 0.6%
2014 17.8% 0.98%
2013 4% 2.51%
2012 5.9% 2.46%
2011 1.2% 2.34%
2010 1.5% 1.28%
2009 3.6% 1.19%
2008 9.2% 2.49%
2007 0.9% 1.61%
2006 6.9% 1.1%
2005 2.9% 1.69%
2004 -2.2% 1.26%
2003 4.4% 2.09%
2002 2.3% 3.29%
2001 3.8% 4.16%
2000 3.2% 2.36%
1999 -1.4% 2.16%
1998 -1.9% 1.96%
1997 1.6% 2.11%

Data sources: International Monetary Fund (IMF) | World Economic Outlook (1997–2025, retrieved 2026-07-08); World Bank | Economy & Growth (1997–2025, retrieved 2026-07-08).

GeoRank.org/economy/central-african-republic/netherlands | CC BY

Over the past 29 years, the Central African Republic has recorded an average annual inflation rate of 3.27%, compared with 2.35% in the Netherlands. In 2025, inflation was 1% in the Central African Republic and 3.26% in the Netherlands.

Top exports between countries

CAR
Export category Export value
Machinery & equipment $216K
Wood & paper products $14K
Netherlands
Export category Export value
Animal & marine products $4.36M
Machinery & equipment $1.84M
Chemicals & pharma $1.56M
Wood & paper products $1.15M
Processed food, beverages & tobacco $904K
Textiles & consumer goods $876K
Raw agricultural goods $204K
Raw materials & minerals $105K
Metals $35K
Miscellaneous $27K

Balance of trade

CAR Netherlands
Current account balance
-$24.7M
1994
$111B
2024
Current account balance ranking
74/190
1994
6/190
2024
Current account balance, % of GDP
-2.9%
1994
+9.14%
2024
Goods imports
$131M
1994
$606B
2024
Goods exports
$146M
1994
$693B
2024
Service imports
$114M
1994
$262B
2024
Service exports
$33.1M
1994
$308B
2024
Imports of goods and services, % of GDP
33.6%
2025
69.5%
2025
Exports of goods and services, % of GDP
19.3%
2025
80.7%
2025

Economic freedom indices

The indices of economic freedom below are issued by the Heritage Foundation. Higher scores indicate stronger economic health.

CAR Netherlands
Economic freedom 43.1 78.5
Economic freedom ranking 182/197 11/197
Property rights 5.6 96
Government integrity 19.2 86.8
Judicial effectiveness 4 96.1
Tax burden 65.5 54
Government spending 90.1 42.2
Fiscal health 59 95.9
Business freedom 26.5 85
Labor freedom 48.5 59.3
Monetary freedom 75.6 77
Trade freedom 47.6 79.4
Investment freedom 45 90
Financial freedom 30 80

Economic freedom comparison by year

Central African Republic
Netherlands
1x
Year Economic freedom index
CAR Netherlands
2026 43.1 78.5
2025 42.8 78.2
2024 41.3 77.3
2023 43.8 78
2022 45.7 79.5
2021 48.8 76.8
2020 50.7 77
2019 49.1 76.8
2018 49.2 76.2
2017 51.8 75.8
2016 45.2 74.6
2015 45.9 73.7
2014 46.7 74.2
2013 50.4 73.5
2012 50.3 73.3
2011 49.3 74.7
2010 48.4 75
2009 48.3 77
2008 48.6 77.4
2007 50.6 75.5
2006 54.2 75.4
2005 56.5 72.9
2004 57.5 74.5
2003 60 74.6
2002 59.8 75.1
2001 - 73
2000 - 70.4
1999 - 70.2
1998 - 69.2
1997 - 70.4
1996 - 69.7

Data sources: The Heritage Foundation | Economic Freedom Index (1996–2026, retrieved 2026-07-08).

GeoRank.org/economy/central-african-republic/netherlands | CC BY

The Economic Freedom Index for the Central African Republic is 43.1, ranking 182/197, compared to 78.5 for the Netherlands, ranking 11/197. The chart above displays a comparison of annual changes in economic freedom indexes.

Other economic metrics

CAR Netherlands
Services, % of GDP
41.4%
2025
70.4%
2025
Industry, % of GDP
21.2%
2025
17.7%
2025
Agriculture, forestry, and fishing, % of GDP
27.6%
2025
1.68%
2025
GNI, Atlas method
$3.1B
2025
$1.24T
2025
GNI per capita, PPP
$1,390
2025
$85,480
2025
Total reserves including gold
$489M
2024
$118B
2025
Total reserves ranking
158/177
2024
27/177
2025
Net foreign direct investment
$3.6M
1994
$11.1B
2024
Net inflows of foreign direct investment
$40.4M
2024
-$17.1B
2024
Net outflows of foreign direct investment
$0
2024
-$5.93B
2024
Servicing debt to the IMF, % of GNI
1.94%
2024
n/a
Poverty at national poverty lines
68.8%
2021
14.5%
2021
Gross capital formation, % of GDP
9.3%
2025
19.8%
2025

GDP per capita map

1x

Data sources: World Bank | Economy & Growth (1985–2025, retrieved 2026-07-08); U.S. Census Bureau (1985–2025, retrieved 2026-07-08).

GeoRank.org/economy/central-african-republic/netherlands | CC BY

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Data sources:

  1. World Bank | Economy & Growth (1960–2025, retrieved 2026-07-08)
  2. International Monetary Fund (IMF) | Fiscal Monitor (1990–2025, retrieved 2026-07-08)
  3. International Monetary Fund (IMF) | Public Finances in Modern History (1880–1996, retrieved 2026-07-08)
  4. The Heritage Foundation | Economic Freedom Index (1996–2026, retrieved 2026-07-08)
  5. U.S. Census Bureau (1985–2025, retrieved 2026-07-08)
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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.