The investment rate measures the percentage of economic output spent on public and private investment in an economy.
It provides an indicator of future wellbeing, because a sound future economy depends on investment.
The indicator measures gross fixed capital formation in relation to GDP. Gross fixed capital formation includes the amount of annual public and private investment in fixed assets that are to be used in the production process for longer than one year. They include buildings, infrastructure, equipment (machinery and vehicles) and other assets (mainly research and development, software and databases).
International rankings are often produced to ascertain investment levels in different countries, but these are problematic for many reasons – for example countries can develop in very different ways in terms of their economy or demographics. It is also important to note which investments in these countries are made by the state and which by private business based on the ownership of the infrastructure.
The data is based on the National Accounts produced by the Federal Statistical Office.