4.6 Gross capital formation

In the context of the national economy, capital refers to factors of production (such as tools, machinery, factories and inventories) that are acquired for longer term use to produce goods and services.

Gross capital formation, again in the national economy context, refers to the value of goods that are added to the domestic capital stock. Net capital formation is arrived at by deducting consumption of fixed capital from gross capital formation.

According to ESA95 (3.100) gross capital formation consists of:

Valuables are defined as goods that are not used primarily for production or consumption, that do not deteriorate (physically) over time under normal conditions and that are acquired and held primarily as stores of value. Examples include precious stones and metals, jewellery fashioned out of precious stones and metals as well as antiques and other objects of art. Since valuables are recorded in the national accounts net of disposals, this is in practice a very small item.