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Economy of Malaysia vs South Africa compared: GDP & Debt

Updated on by Georank

Malaysia has a GDP of $472B compared to $427B for South Africa, ranking 35/197 and 40/197 by economy size, respectively.

Malaysia has $334B in government debt (70.7% of GDP), compared to $336B (78.6% of GDP) in South Africa.

Malaysia vs South Africa GDP by year

Malaysia
South Africa
1x
Year GDP, current $
Malaysia South Africa
2025 $472,193,128,645 $427,184,325,997
2024 $422,227,005,429 $401,144,998,374
2023 $399,949,418,753 $381,440,724,491
2022 $407,830,525,990 $407,596,043,068
2021 $373,784,553,030 $419,986,284,375
2020 $337,456,163,961 $337,974,655,408
2019 $365,177,721,022 $389,330,032,224
2018 $358,788,845,713 $405,260,723,893
2017 $319,109,094,160 $381,448,814,653
2016 $301,256,033,870 $323,585,509,674
2015 $301,355,266,965 $346,709,790,459
2014 $338,066,095,097 $381,198,869,776
2013 $323,276,235,524 $400,886,013,596
2012 $314,443,047,642 $434,400,545,086
2011 $297,951,668,675 $458,199,494,831
2010 $255,017,638,456 $417,363,822,802
2009 $202,257,453,037 $329,754,060,647
2008 $230,811,614,370 $316,131,258,616
2007 $193,549,569,478 $333,077,117,254
2006 $162,692,258,307 $303,858,675,364
2005 $143,534,405,819 $288,867,217,197
2004 $124,749,473,684 $255,806,908,595
2003 $110,202,368,421 $197,018,965,309
2002 $100,845,526,316 $129,087,556,612
2001 $92,783,947,368 $135,429,905,923
2000 $93,789,736,842 $151,752,757,215
1999 $79,148,421,053 $151,516,957,079
1998 $72,167,498,981 $152,982,984,557
1997 $100,005,323,302 $168,978,057,328
1996 $100,855,393,910 $163,234,925,381
1995 $88,705,342,903 $171,735,933,897
1994 $74,478,356,958 $153,512,712,382
1993 $66,894,966,969 $147,194,747,566
1992 $59,167,550,163 $146,956,150,987
1991 $49,143,148,094 $135,203,698,238
1990 $44,024,585,240 $126,048,140,142
1989 $38,847,965,293 $108,055,624,082
1988 $35,272,109,220 $103,976,831,871
1987 $32,181,210,158 $96,535,763,418
1986 $27,734,111,400 $73,354,771,399
1985 $31,199,633,353 $64,459,376,087
1984 $33,942,897,422 $84,870,163,366
1983 $30,347,442,111 $96,204,110,942
1982 $26,804,493,635 $85,904,057,409
1981 $25,004,285,792 $93,141,472,164
1980 $24,488,224,677 $89,411,864,402
1979 $21,213,264,962 $63,038,658,089
1978 $16,358,079,862 $51,607,412,902
1977 $13,139,488,633 $45,328,411,332
1976 $11,050,234,599 $41,150,460,288
1975 $9,298,800,799 $42,906,905,672
1974 $9,496,204,302 $41,389,186,095
1973 $7,662,902,678 $33,262,772,008
1972 $5,043,347,250 $24,515,919,217
1971 $4,244,395,956 $23,411,076,638
1970 $3,864,145,667 $21,218,391,513
1969 $3,664,552,041 $19,256,992,297
1968 $3,330,371,551 $17,124,793,150
1967 $3,188,924,677 $15,821,393,671
1966 $3,143,517,944 $14,211,394,315
1965 $2,956,337,669 $13,068,994,772
1964 $2,674,423,922 $11,955,995,218
1963 $2,510,110,348 $10,854,195,658
1962 $2,001,489,602 $9,813,996,074
1961 $1,901,856,123 $9,225,996,310
1960 $1,916,229,477 $8,748,596,501

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

GeoRank.org/economy/malaysia/south-africa | CC BY

GDP per capita in Malaysia vs South Africa by year

Malaysia
GDP per capita

GDP per capita, PPP
South Africa
GDP per capita

GDP per capita, PPP
1x
Year Current $
Malaysia South Africa
GDP per capita GDP per capita, PPP GDP per capita GDP per capita, PPP
2025 $13,125 - $6,598 -
2024 $11,874 $38,779 $6,267 $15,456
2023 $11,386 $36,467 $6,034 $15,200
2022 $11,755 $34,420 $6,534 $14,749
2021 $10,903 $29,823 $6,829 $13,682
2020 $9,958 $27,475 $5,581 $12,671
2019 $10,920 $28,934 $6,534 $13,361
2018 $10,902 $27,794 $6,914 $13,347
2017 $9,863 $26,416 $6,618 $13,738
2016 $9,477 $25,286 $5,651 $13,519
2015 $9,649 $24,526 $6,112 $13,398
2014 $11,013 $24,307 $6,857 $13,359
2013 $10,714 $23,161 $7,332 $13,369
2012 $10,601 $22,639 $8,077 $12,987
2011 $10,217 $21,324 $8,646 $13,143
2010 $8,899 $20,193 $7,973 $12,637
2009 $7,191 $18,923 $6,375 $12,261
2008 $8,372 $19,480 $6,185 $12,525
2007 $7,169 $18,617 $6,592 $12,047
2006 $6,158 $17,426 $6,077 $11,250
2005 $5,556 $16,371 $5,837 $10,441
2004 $4,939 $15,416 $5,221 $9,714
2003 $4,465 $14,387 $4,062 $9,139
2002 $4,184 $13,656 $2,688 $8,792
2001 $3,944 $13,072 $2,847 $8,428
2000 $4,084 $13,027 $3,218 $8,095
1999 $3,528 $11,980 $3,242 $7,667
1998 $3,294 $11,398 $3,310 $7,463
1997 $4,679 $12,469 $3,700 $7,433
1996 $4,837 $11,709 $3,618 $7,208
1995 $4,363 $10,720 $3,856 $6,875
1994 $3,758 $9,806 $3,489 $6,611
1993 $3,462 $9,018 $3,400 $6,375
1992 $3,141 $8,224 $3,462 $6,275
1991 $2,679 $7,583 $3,243 $6,383
1990 $2,469 $6,887 $3,093 $6,382
1989 $2,244 - $2,727 -
1988 $2,100 - $2,702 -
1987 $1,977 - $2,586 -
1986 $1,760 - $2,027 -
1985 $2,046 - $1,839 -
1984 $2,300 - $2,504 -
1983 $2,124 - $2,938 -
1982 $1,938 - $2,717 -
1981 $1,866 - $3,050 -
1980 $1,886 - $3,029 -
1979 $1,680 - $2,202 -
1978 $1,327 - $1,852 -
1977 $1,092 - $1,671 -
1976 $940 - $1,559 -
1975 $811 - $1,670 -
1974 $848 - $1,656 -
1973 $701 - $1,369 -
1972 $472 - $1,038 -
1971 $407 - $1,020 -
1970 $380 - $952 -
1969 $368 - $891 -
1968 $342 - $817 -
1967 $335 - $779 -
1966 $339 - $722 -
1965 $326 - $685 -
1964 $303 - $646 -
1963 $291.8 - $605 -
1962 $238.8 - $563 -
1961 $232.9 - $546 -
1960 $240.8 - $532 -

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

GeoRank.org/economy/malaysia/south-africa | CC BY

Malaysia's GDP per capita is $13,125, ranking 78/197, compared to $6,598 in South Africa, ranking 109/197. Adjusted for purchasing power (GDP per capita PPP), Malaysia ranks 60th at $38,779, while South Africa ranks 112th at $15,456.

Economic indicators

Malaysia South Africa
Gross domestic product
$472B
2025
$427B
2025
GDP rank
35/197
2025
40/197
2025
GDP growth
5.17%
2024-2025
1.11%
2024-2025
GDP per capita
$13,125
2025
$6,598
2025
GDP per capita rank
78/197
2025
109/197
2025
GDP per capita, PPP
$38,779
2024
$15,456
2024
GDP per capita PPP rank
60/197
2024
112/197
2024
Government debt
$334B
2025
$336B
2025
Debt-to-GDP ratio
70.7%
2025
78.6%
2025
Government debt per person
$9,273
2025
$5,189
2025
Government debt per person rank
62/185
2025
84/185
2025
Average annual personal income after taxes
$11,034
2026
$4,738
2026
Market capitalization of domestic companies
$487B
2025
$1.4T
2025
Number of millionaires n/a
97,000
2026
Number of billionaires
19
2026
7
2026
Income share by richest 10%
30.9%
2021
42.1%
2022
Income share by poorest 10%
2.3%
2021
1.4%
2022
Government expenditure, % of GDP
23.4%
2025
34.2%
2025
Consumer prices inflation
1.38%
2024-2025
3.21%
2024-2025
Central bank interest rate
2.75%
2025
7%
2026
Unemployment rate
3.9%
2022
32.3%
2024
Population
36600906
65829368

Spending and national debt comparison by year

Malaysia
Spending

Debt
South Africa
Spending

Debt
1x
Year % of GDP
Malaysia South Africa
Government spending Government debt Government spending Government debt
2025 23.4% 70.7% 34.2% 78.6%
2024 24% 69.8% 33% 76%
2023 25% 69.7% 32.5% 73.2%
2022 24.6% 65.5% 31.9% 70.7%
2021 24.5% 69.2% 32.7% 68.8%
2020 25% 67.7% 34.6% 68.9%
2019 23.6% 57.1% 31.4% 56.1%
2018 22.8% 55.6% 30.2% 51.5%
2017 22% 54.4% 29.9% 48.6%
2016 22.9% 55.8% 29.9% 47.1%
2015 24.7% 57% 30.2% 45.2%
2014 26% 55.4% 29.3% 43.3%
2013 27.8% 55.7% 28.9% 40.4%
2012 28.5% 53.8% 28.6% 37.4%
2011 27.1% 51.9% 28.1% 34.7%
2010 26.6% 51.2% 28.3% 31.2%
2009 30.9% 50.4% 28.5% 27%
2008 26.9% 39.4% 26% 24%
2007 25.9% 39.3% 24.4% 24.3%
2006 25.6% 39.7% 24.7% 28%
2005 24.5% 40.8% 25.1% 29.6%
2004 25.9% 42% 22.7% 30.7%
2003 28.1% 41.4% 22.6% 31.5%
2002 27.1% 39.5% 22.2% 31.8%
2001 28.2% 38.1% 22.6% 38%
2000 25.6% 32.5% 22.6% 37.9%
1999 24.6% 34.4% 26.7% 45.9%
1998 23.1% 33.6% 27.1% 45.8%
1997 21.2% 29.6% 27.9% 45.8%
1996 22.4% 32.8% 28.5% 44.3%
1995 22.6% 38.2% 27.2% 47%
1994 23.3% 43.7% 31.3% 46.4%
1993 24.6% 51.1% 29.1% 39.8%
1992 28.2% 59.1% 29.8% 34.8%
1991 27.4% 67.3% 27.8% 34.7%
1990 30.5% 74.1% 28.7% 31.8%
1989 - - 29.6% 33.3%
1988 - - 23.9% 30.6%
1987 - - 28% 33.5%
1986 - - 27.8% 32.5%
1985 - - 26.8% 26.3%
1984 - - 25.2% 23.2%
1983 - - 25.1% 28.7%
1982 - - 23.8% 31.3%
1981 - - 23.3% 27.4%
1980 - - 21.8% 33.3%
1979 - - 26.5% 41.9%
1978 - - 26.8% 44.7%
1977 - - 27.3% 45.3%
1976 - - 23% 35%
1975 - - 21.2% 32.8%
1974 - - 19.1% 33.7%
1973 - - 21% 38.2%
1972 - - 22.9% 41.1%
1971 - - 19.9% 41.1%
1970 - - 20% 43.3%
1969 - - 18.8% 44.4%
1968 - - 19.4% 42.7%
1967 - - 18.8% 41.1%
1966 - - 18.3% 41.4%
1965 - - 18.2% 42.7%
1964 - - 11.3% 30%
1963 - - 15.9% 43.4%
1962 - - 15.9% 45.7%
1961 - - 15.7% 52.8%
1960 - - 16.7% 52.9%

Data sources: International Monetary Fund (IMF) | Fiscal Monitor (1990–2025, retrieved 2026-07-08); International Monetary Fund (IMF) | Public Finances in Modern History (1960–1999, retrieved 2026-07-08).

GeoRank.org/economy/malaysia/south-africa | CC BY

In 2025, Malaysia's government spending was $111B, accounting for 23.4% of its GDP, while South Africa spent $146B, or 34.2% of GDP.

Debt-to-GDP ratio is 70.7% in Malaysia and 78.6% in South Africa, ranking 56/185 and 46/185, respectively.

Government deficit by year

Deficit/surplus
Malaysia

South Africa
1x
Year Deficit/surplus, % of GDP
Malaysia South Africa
2025 -3.54% -5.78%
2024 -3.45% -5.67%
2023 -4.11% -5.6%
2022 -4.56% -4.25%
2021 -6.03% -5.54%
2020 -4.9% -9.62%
2019 -2.01% -5.07%
2018 -2.64% -3.73%
2017 -2.41% -4.02%
2016 -2.6% -3.72%
2015 -2.55% -4.37%
2014 -2.63% -3.93%
2013 -3.48% -3.9%
2012 -3.1% -4.04%
2011 -3.57% -3.7%
2010 -4.32% -4.51%
2009 -5.88% -4.67%
2008 -3.4% -0.49%
2007 -2.57% 1.22%
2006 -2.6% 0.81%
2005 -2.83% -0.1%
2004 -3.35% -1.04%
2003 -4.6% -1.59%
2002 -3.96% -0.96%
2001 -4.36% -1.02%
2000 -6.05% -1.38%
1999 -3% -2.21%
1998 -0.63% -2.56%
1997 4.84% -4.08%
1996 3.27% -4.53%
1995 3.1% -4.38%
1994 5.45% -8.09%
1993 3.44% -8.54%
1992 1.81% -7.09%
1991 1.6% -4.85%
1990 0.15% -3.82%
1989 - -8.3%
1988 - -3.29%
1987 - -6.36%
1986 - -5.69%
1985 - -4.86%
1984 - -5.24%
1983 - -5.3%
1982 - -3.88%
1981 - -3.72%
1980 - -1.91%
1979 - -4.65%
1978 - -5.42%
1977 - -5.52%
1976 - -4.19%
1975 - -2.62%
1974 - -1.5%
1973 - -4.54%
1972 - -5.39%
1971 - -1.96%
1970 - -3.19%
1969 - -3.94%
1968 - -3.38%
1967 - -3.8%
1966 - -3.04%
1965 - -3.15%
1964 - -1.19%
1963 - -2.26%
1962 - -1.4%
1961 - -3.25%
1960 - -2.36%
1959 - -4.4%
1958 - -3.5%
1957 - -2.8%
1956 - -2.12%
1955 - -2.9%
1954 - -2.53%
1953 - -3.72%
1952 - -4.14%
1951 - -0.4%
1950 - -2.33%
1949 - -6.87%
1948 - -6.03%
1947 - -1.82%
1946 - -4.03%
1945 - -7.41%
1944 - -8.94%
1943 - -8.49%
1942 - -9.08%
1941 - -7.3%
1940 - -10.9%
1939 - -2.96%
1938 - -3.91%
1937 - -2.16%
1936 - -2.58%
1935 - -3.2%
1934 - -3.29%
1933 - -3.31%
1932 - -4.72%
1931 - -5.31%
1930 - -5.19%
1929 - -4.41%
1928 - -3.29%
1927 - -3.79%
1926 - -4.76%
1925 - -4.92%
1924 - -4.72%
1923 - -5.53%
1922 - -4.51%
1921 - -5.38%
1920 - -5.52%
1919 - -2.6%
1918 - -3.7%
1917 - -3.52%
1916 - -2.57%
1915 - -10.7%
1914 - -11.6%
1913 - -4.15%

Data sources: International Monetary Fund (IMF) | Public Finances in Modern History (1913–1999, retrieved 2026-07-08); International Monetary Fund (IMF) | Fiscal Monitor (1990–2025, retrieved 2026-07-08).

GeoRank.org/economy/malaysia/south-africa | CC BY

In 2025, Malaysia's government deficit, the difference between spending and revenue, was $16.7B, equivalent to 3.54% of GDP. This compares to South Africa's deficit of $24.7B, or 5.78% of GDP.

Over the past 36 years, Malaysia recorded a fiscal deficit in 28 of those years, while South Africa ran a deficit in 34 years. On average, Malaysia posted an annual deficit equal to 2.1% of GDP, compared to deficit of 3.8% of GDP for South Africa.

Inflation comparison by year

Inflation
Malaysia

South Africa
1x
Year Consumer prices inflation
Malaysia South Africa
2025 1.38% 3.21%
2024 1.83% 4.36%
2023 2.49% 6.08%
2022 3.38% 7.04%
2021 2.48% 4.62%
2020 -1.14% 3.23%
2019 0.66% 4.1%
2018 0.88% 4.51%
2017 3.87% 5.19%
2016 2.09% 6.6%
2015 2.1% 4.52%
2014 3.14% 6.13%
2013 2.11% 5.78%
2012 1.66% 5.74%
2011 3.17% 5%
2010 1.62% 4.07%
2009 0.58% 7.24%
2008 5.44% 9.91%
2007 2.03% 6.18%
2006 3.61% 3.24%
2005 2.98% 2.06%
2004 1.42% -0.69%
2003 1.09% 5.68%
2002 1.81% 9.49%
2001 1.42% 5.7%
2000 1.53% 5.34%
1999 2.74% 5.18%
1998 5.27% 6.88%
1997 2.66% 8.6%

Data sources: World Bank | Economy & Growth (1997–2025, retrieved 2026-07-08).

GeoRank.org/economy/malaysia/south-africa | CC BY

Over the past 29 years, Malaysia has recorded an average annual inflation rate of 2.22%, compared with 5.34% in South Africa. In 2025, inflation was 1.38% in Malaysia and 3.21% in South Africa.

Top exports between countries

Malaysia
Export category Export value
Processed food, beverages & tobacco $305M
Machinery & equipment $175M
Raw materials & minerals $118M
Chemicals & pharma $79.1M
Textiles & consumer goods $32.7M
Metals $30.3M
Wood & paper products $17.7M
Miscellaneous $4.44M
Raw agricultural goods $2.88M
Animal & marine products $136K
South Africa
Export category Export value
Raw materials & minerals $261M
Metals $195M
Raw agricultural goods $132M
Machinery & equipment $18.9M
Processed food, beverages & tobacco $10.8M
Chemicals & pharma $10.6M
Wood & paper products $2.62M
Textiles & consumer goods $1.09M
Precious metals & jewellery $924K
Animal & marine products $903K

Balance of trade

Malaysia South Africa
Current account balance
$7.15B
2024
-$1.81B
2025
Current account balance ranking
29/190
2024
135/190
2025
Current account balance, % of GDP
+1.69%
2024
-0.42%
2025
Goods imports
$223B
2024
$104B
2025
Goods exports
$248B
2024
$116B
2025
Service imports
$56.4B
2024
$21.8B
2025
Service exports
$53.4B
2024
$18.1B
2025
Imports of goods and services, % of GDP
65.4%
2025
29.5%
2025
Exports of goods and services, % of GDP
71%
2025
31.4%
2025

Economic freedom indices

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

Malaysia South Africa
Economic freedom 68 58.6
Economic freedom ranking 51/197 110/197
Property rights 62.7 48.8
Government integrity 52.9 46.7
Judicial effectiveness 63.4 64.6
Tax burden 83.5 65.4
Government spending 82 68.4
Fiscal health 62.5 45.3
Business freedom 79.6 67.9
Labor freedom 55.4 70.8
Monetary freedom 80.8 75.8
Trade freedom 83 68.8
Investment freedom 60 40
Financial freedom 50 40

Economic freedom comparison by year

Malaysia
South Africa
1x
Year Economic freedom index
Malaysia South Africa
2026 68 58.6
2025 67.1 57.3
2024 65.7 55.3
2023 67.3 55.7
2022 68.1 56.2
2021 74.4 59.7
2020 74.7 58.8
2019 74 58.3
2018 74.5 63
2017 73.8 62.3
2016 71.5 61.9
2015 70.8 62.6
2014 69.6 62.5
2013 66.1 61.8
2012 66.4 62.7
2011 66.3 62.7
2010 64.8 62.8
2009 64.6 63.8
2008 63.9 63.4
2007 63.8 63.5
2006 61.6 63.7
2005 61.9 62.9
2004 59.9 66.3
2003 61.1 67.1
2002 60.1 64
2001 60.2 63.8
2000 66 63.7
1999 68.9 63.3
1998 68.2 64.3
1997 66.8 63.2
1996 69.9 62.5
1995 71.9 60.7

Data sources: The Heritage Foundation | Economic Freedom Index (1995–2026, retrieved 2026-07-08).

GeoRank.org/economy/malaysia/south-africa | CC BY

The Economic Freedom Index for Malaysia is 68, ranking 51/197, compared to 58.6 for South Africa, ranking 110/197. The chart above displays a comparison of annual changes in economic freedom indexes.

Other economic metrics

Malaysia South Africa
Services, % of GDP
54.8%
2025
63.1%
2025
Industry, % of GDP
35.7%
2025
24.1%
2025
Agriculture, forestry, and fishing, % of GDP
8.22%
2025
2.83%
2025
GNI, Atlas method
$445B
2025
$406B
2025
GNI per capita, PPP
$40,070
2025
$15,600
2025
Total reserves including gold
$126B
2025
$76B
2025
Total reserves ranking
25/177
2025
35/177
2025
Net foreign direct investment
-$2.55B
2024
-$1.85B
2025
Net inflows of foreign direct investment
$15.6B
2024
$2.33B
2024
Net outflows of foreign direct investment
$13B
2024
-$1.26B
2024
Servicing debt to the IMF, % of GNI n/a
5.74%
2024
Poverty at national poverty lines
5.1%
2023
37.9%
2022
Gross capital formation, % of GDP
20.5%
2025
13.9%
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/malaysia/south-africa | 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 (1913–1999, retrieved 2026-07-08)
  4. The Heritage Foundation | Economic Freedom Index (1995–2026, retrieved 2026-07-08)
  5. U.S. Census Bureau (1985–2025, retrieved 2026-07-08)
  6. TradeMap (2025, retrieved 2026-07-08)
  7. United Nations | World Population Prospects (2026, retrieved 2026-07-08)
  8. LivingCost (2026, 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.