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Netherlands' economy ranking: GDP & GDP per capita, debt

Updated on by Georank team

The Netherlands ranked 19/197 by economy size with a GDP of $1.23T and 13/197 by GDP per capita at $68,219. The Netherlands has $531B in government debt, with a debt-to-GDP ratio of 43.3%.

In 2025, the Netherlands made up 1.1% of the world's economy, compared to 0.97% in 1960.

The chart below shows GDP in nominal terms, GDP adjusted for inflation (in constant dollars), and a bar chart of year-over-year inflation-adjusted growth.

GDP, current $
GDP, constant 2015 $
GDP growth
Year GDP GDP growth
Current $ Constant $
1960 $13,282,979,015 $165,062,637,640 -
1961 $14,599,836,396 $165,550,474,774 9.91%
1962 $15,847,582,341 $176,879,933,635 8.55%
1963 $17,193,744,109 $183,291,161,793 8.49%
1964 $20,232,048,553 $198,458,329,344 17.7%
1965 $22,721,869,808 $215,611,271,157 12.3%
1966 $24,741,480,717 $221,521,401,057 8.89%
1967 $27,143,828,099 $233,217,763,700 9.71%
1968 $30,097,635,751 $248,181,328,024 10.9%
1969 $34,086,038,090 $264,138,020,130 13.3%
1970 $38,220,884,519 $280,356,573,733 12.1%
1971 $44,644,730,576 $292,459,511,974 16.8%
1972 $54,787,070,173 $302,794,664,266 22.7%
1973 $71,946,639,603 $319,279,481,312 31.3%
1974 $87,371,810,804 $330,258,601,498 21.4%
1975 $100,397,061,694 $330,265,301,638 14.9%
1976 $109,329,386,564 $344,982,946,319 8.9%
1977 $127,203,923,857 $353,678,035,788 16.3%
1978 $156,089,077,205 $363,214,067,825 22.7%
1979 $179,933,827,310 $370,529,803,464 15.3%
1980 $195,439,301,707 $375,501,994,722 8.62%
1981 $164,375,775,854 $372,559,517,530 -15.9%
1982 $158,712,765,536 $367,936,960,746 -3.45%
1983 $153,671,294,109 $375,553,101,273 -3.18%
1984 $144,124,462,912 $387,051,331,969 -6.21%
1985 $144,057,523,222 $397,037,952,227 -0.05%
1986 $201,157,708,221 $408,103,304,156 39.6%
1987 $245,406,949,521 $415,984,792,778 22%
1988 $262,295,966,105 $430,299,740,005 6.88%
1989 $258,716,904,292 $449,319,496,513 -1.36%
1990 $318,799,003,994 $468,115,532,100 23.2%
1991 $327,982,316,124 $479,533,499,921 2.88%
1992 $363,497,050,125 $487,714,681,271 10.8%
1993 $354,070,495,966 $493,847,948,233 -2.59%
1994 $379,688,232,232 $508,471,242,745 7.24%
1995 $452,967,334,614 $524,315,389,158 19.3%
1996 $451,372,549,020 $542,250,002,540 -0.35%
1997 $417,506,211,882 $565,287,382,970 -7.5%
1998 $438,612,530,549 $591,560,723,040 5.06%
1999 $447,778,514,140 $621,395,031,368 2.09%
2000 $417,649,282,154 $647,616,371,669 -6.73%
2001 $432,536,219,669 $662,664,228,364 3.56%
2002 $475,529,972,123 $664,292,962,005 9.94%
2003 $582,435,617,082 $664,942,855,515 22.5%
2004 $661,224,886,143 $678,350,164,554 13.5%
2005 $688,133,699,636 $692,147,558,367 4.07%
2006 $737,593,995,289 $716,631,413,730 7.19%
2007 $853,499,460,873 $744,474,740,256 15.7%
2008 $957,901,566,041 $760,233,900,200 12.2%
2009 $878,954,223,140 $732,369,119,343 -8.24%
2010 $852,464,982,433 $742,031,413,974 -3.01%
2011 $913,140,741,333 $755,190,192,160 7.12%
2012 $845,689,017,066 $747,805,361,888 -7.39%
2013 $883,951,539,007 $747,579,281,183 4.52%
2014 $901,556,501,756 $759,634,819,526 1.99%
2015 $775,743,675,303 $775,743,675,303 -14%
2016 $797,163,949,290 $794,549,918,521 2.76%
2017 $848,233,537,846 $816,650,691,532 6.41%
2018 $929,733,599,797 $835,096,710,413 9.61%
2019 $928,903,005,576 $854,304,699,527 -0.09%
2020 $932,560,861,701 $821,260,592,383 0.39%
2021 $1,054,472,123,450 $872,809,729,133 13.1%
2022 $1,046,540,797,549 $916,513,359,460 -0.75%
2023 $1,154,361,305,398 $917,196,719,472 10.3%
2024 $1,227,543,925,316 $926,182,265,714 6.34%

Economic Statistics of the Netherlands

Netherlands Rank
Gross domestic product
$1.23T
2024
19/197
GDP growth
6.34%
2023-2024
87/196
GDP per capita
$68,219
2024
13/197
GDP per capita, PPP
$84,218
2024
12/197
Government debt
$531B
2024
19/185
Debt-to-GDP ratio
43.3%
2025
124/185
Government debt per person
$29,494
2024
25/185
Average annual personal income after taxes
$45,699
2025
12/197
Listed domestic companies
103
2018
49/103
Market capitalization of domestic companies
$1.1T
2017
13/100
Number of millionaires
1,231,625
2024
11/34
Millionaire frequency
1 in 12
2024
3/34
Number of billionaires
13
2025
29/78
Billionaire frequency
1 in 1,099,143
2025
33/78
Income share by richest 10%
21.4%
2021
164/169
Income share by poorest 10%
3.6%
2021
31/169
Government expenditure, % of GDP
44.7%
2025
34/195
Consumer prices inflation
3.35%
2023-2024
92/195
Unemployment rate
3.64%
2024
131/196
Population
18191638
72/197

Netherlands' GDP per capita

The Netherlands has a GDP per capita of $68,219, ranking 13/197, a GDP per capita based on purchasing power parity (PPP) of $84,218, ranking 12/197, and a median annual after tax income of $45,699, ranking 12/197.

GDP per capita
GDP per capita, PPP
Year Current $
GDP per capita GDP per capita, PPP
1960 $1,156 -
1961 $1,254 -
1962 $1,342 -
1963 $1,437 -
1964 $1,668 -
1965 $1,848 -
1966 $1,986 -
1967 $2,155 -
1968 $2,364 -
1969 $2,647 -
1970 $2,931 -
1971 $3,384 -
1972 $4,110 -
1973 $5,353 -
1974 $6,450 -
1975 $7,346 -
1976 $7,937 -
1977 $9,180 -
1978 $11,196 -
1979 $12,817 -
1980 $13,812 -
1981 $11,537 -
1982 $11,089 -
1983 $10,696 -
1984 $9,992 -
1985 $9,941 -
1986 $13,804 -
1987 $16,734 -
1988 $17,771 -
1989 $17,423 -
1990 $21,322 $19,190
1991 $21,764 $20,164
1992 $23,939 $20,817
1993 $23,156 $21,428
1994 $24,683 $22,399
1995 $29,301 $23,465
1996 $29,064 $24,555
1997 $26,745 $26,056
1998 $27,924 $27,747
1999 $28,319 $29,316
2000 $26,225 $31,888
2001 $26,956 $33,263
2002 $29,447 $34,568
2003 $35,897 $34,291
2004 $40,611 $35,966
2005 $42,165 $37,778
2006 $45,124 $41,217
2007 $52,101 $44,205
2008 $58,247 $46,714
2009 $53,172 $44,936
2010 $51,306 $45,306
2011 $54,702 $47,004
2012 $50,474 $47,653
2013 $52,602 $49,622
2014 $53,457 $49,751
2015 $45,794 $50,970
2016 $46,809 $53,162
2017 $49,514 $56,038
2018 $53,955 $58,819
2019 $53,555 $62,345
2020 $53,468 $62,597
2021 $60,142 $68,574
2022 $59,123 $77,152
2023 $64,572 $78,305
2024 $68,219 $84,218

Netherlands' government spending, deficit, and chart

This chart shows the Netherlands' government spending, budget balance, and debt over time, each expressed as a share of GDP.

Over the past 50 years, the Netherlands recorded a fiscal deficit in 42 years — average annual deficit equal to -2.45% of GDP. In 2024, government spending reached $541B (44.7% of GDP), with a deficit of -1.9%.

The national debt reached $531B, ranking 19th out of 185 countries by total size, with a debt-to-GDP ratio of 43.3%, ranking 124th.

Government spending
Government debt
Deficit/surplus
Year % of GDP
Government spending Government debt Government deficit/surplus
1814 - 141.9% -
1815 - 138.5% -
1816 - 131.8% -
1817 - 120.9% -
1818 - 140.2% -
1819 - 166.3% -
1820 - 169.5% -
1821 - 182.2% -
1822 - 189.8% -
1823 - 183.6% -
1824 - 207.6% -
1825 - 195% -
1826 - 208.3% -
1827 - 196.4% -
1828 - 204% -
1829 - 198.6% -
1830 - 210.5% -
1831 - 196.9% -
1832 - 198.8% -
1833 - 236.6% -
1834 - 246.8% -
1835 - 245% -
1836 - 223.1% -
1837 - 235.9% -
1838 - 223.8% -
1839 - 212.3% -
1840 - 216.3% -
1841 - 215.2% -
1842 - 222.3% -
1843 - 234.9% -
1844 - 243.9% -
1845 - 221.1% -
1846 - 189.4% -
1847 - 171.3% -
1848 - 200.5% -
1849 - 201.6% -
1850 - 200.9% -
1851 - 196.7% -
1852 - 188.5% -
1853 - 185% -
1854 - 158.3% -
1855 - 160.3% -
1856 - 145.3% -
1857 - 145.2% -
1858 - 156.1% -
1859 - 156.3% -
1860 - 140% -
1861 - 135.7% -
1862 - 121.6% -
1863 - 119.9% -
1864 - 113.5% -
1865 - 112.7% -
1866 - 104% -
1867 - 106.1% -
1868 - 106.4% -
1869 - 102.7% -
1870 - 100.1% -
1871 - 96.9% -
1872 - 86.6% -
1873 - 79.7% -
1874 - 81.7% -
1875 - 83.7% -
1876 - 85% -
1877 - 82.9% -
1878 - 87.3% -
1879 - 92.6% -
1880 9.6% 87% 0.21%
1881 10.6% 86.7% -1.06%
1882 10.7% 83.4% -1.11%
1883 11.2% 85.2% -2.1%
1884 10.9% 87% 0%
1885 11% 91.6% -0.55%
1886 11.5% 94.6% -0.08%
1887 10.8% 101.3% -0.37%
1888 11.4% 98.2% -0.31%
1889 10.2% 93.5% 0.04%
1890 13.9% 93.1% -0.06%
1891 10.7% 92.1% -0.06%
1892 12.9% 96.4% -1.72%
1893 11.9% 101.4% -0.76%
1894 11.3% 97.6% 0.12%
1895 11.3% 98.5% -0.06%
1896 11% 94% 0.08%
1897 11.4% 93.9% -0.45%
1898 11.3% 90.1% -0.48%
1899 10.7% 92% -0.13%
1900 11% 88.6% 0.06%
1901 10.3% 88.1% 0.03%
1902 10.7% 86.7% -0.14%
1903 10.9% 85.2% 0.09%
1904 10.8% 81.6% -0.72%
1905 10.3% 81% 0.1%
1906 9.83% 76.4% 0.16%
1907 9.86% 77.8% 0.03%
1908 10.4% 80.7% -0.57%
1909 10.4% 77.1% -0.34%
1910 10.2% 73% -0.93%
1911 9.05% 67.9% -0.13%
1912 9.3% 65.3% -0.47%
1913 9.53% 64.1% -0.45%
1914 - 63.7% -0.45%
1915 - 60.7% -0.45%
1916 - 60.1% -0.45%
1917 - 66.2% -0.45%
1918 - 73.4% -0.45%
1919 - 63% -0.45%
1920 - 62% -0.45%
1921 - 72.5% -0.45%
1922 - 80.3% -0.45%
1923 8.56% 88.9% -2.62%
1924 7.79% 86.3% -3.37%
1925 7.66% 85.4% -2.04%
1926 7.6% 83% -0.78%
1927 7.89% 80.2% -0.33%
1928 7.38% 76.3% -0.62%
1929 8.08% 74.2% -1.16%
1930 8.69% 78.7% -0.55%
1931 10.9% 90.4% -1.66%
1932 12% 105.3% -1.97%
1933 11.9% 116.1% -2.55%
1934 12.1% 118.2% -0.92%
1935 11.8% 121.8% -0.69%
1936 11% 122.2% -0.41%
1937 9.9% 120.9% 0.02%
1938 10.3% 117.9% -0.37%
1939 13.3% 110.8% -3.19%
1940 - - -3.19%
1941 - - -3.19%
1942 - - -3.19%
1943 - - -3.19%
1944 - - -3.19%
1945 - - -3.19%
1946 - 223% -3.19%
1947 - 214% -3.19%
1948 - 175.9% -3.19%
1949 24% 162.4% 2.3%
1950 24% 137.3% 0.81%
1951 23.7% 118.4% 2.13%
1952 23% 106.9% 2.19%
1953 25.7% 101.5% -2.95%
1954 22.6% 88.7% 0.76%
1955 23.2% 80.1% -0.25%
1956 22.5% 75% -0.83%
1957 21.2% 72.6% 0.3%
1958 20.9% 75% -0.89%
1959 21.6% 73.4% -0.74%
1960 20.4% 66.7% 0.9%
1961 22.2% 65.9% -0.38%
1962 22.1% 63.8% -1.38%
1963 21.9% 61.7% -0.54%
1964 22.3% 57.1% -1.2%
1965 23.4% 55.8% -1.15%
1966 24.4% 55.6% -2.37%
1967 24.1% 55% -1.97%
1968 25.4% 54.4% -3.06%
1969 42.1% 48.2% -1.14%
1970 43.2% 46.1% -1.52%
1971 44.6% 43.7% -1.58%
1972 44.9% 41.3% -0.7%
1973 44.6% 38.1% 0.54%
1974 46.4% 36.3% -0.26%
1975 50.8% 36.1% -2.82%
1976 50.8% 35.2% -2.02%
1977 50.6% 34.9% -0.75%
1978 52.3% 38.1% -2.09%
1979 53.7% 39.5% -2.46%
1980 55.2% 43.6% -3.95%
1981 56.8% 46.9% -4.92%
1982 59.1% 52.4% -6.17%
1983 59.1% 58.4% -5.47%
1984 58.1% 61.9% -5.25%
1985 57.3% 67.1% -3.6%
1986 57% 68.9% -4.62%
1987 58.5% 71.3% -5.39%
1988 56.4% 73.7% -4.23%
1989 54.5% 73.7% -5%
1990 48.8% 75% -4.08%
1991 49.6% 74.8% -2.05%
1992 50.2% 75.6% -3.12%
1993 50.9% 76.7% -3.13%
1994 49.4% 73.5% -3.53%
1995 53.9% 73% -8.72%
1996 47.3% 71.2% -1.91%
1997 45.7% 65.7% -1.6%
1998 44.6% 62.7% -1.34%
1999 44.3% 58.6% 0.28%
2000 43.2% 52.2% 1.14%
2001 44.1% 49.4% -0.47%
2002 44.8% 48.7% -2.23%
2003 45.8% 49.8% -3.19%
2004 44.7% 50.1% -1.82%
2005 43.4% 49.6% -0.51%
2006 44% 45% 0.03%
2007 43.3% 42.7% -0.26%
2008 44.3% 54.4% -0.004%
2009 48.4% 56.3% -5.1%
2010 48.9% 58.9% -5.28%
2011 47.8% 61.2% -4.42%
2012 47.6% 65.7% -3.84%
2013 47.5% 67.2% -2.86%
2014 46.7% 67.2% -2.24%
2015 45.3% 63.8% -1.78%
2016 43.9% 60.9% 0.23%
2017 42.8% 56% 1.32%
2018 42.4% 51.5% 1.47%
2019 42.1% 47.6% 1.78%
2020 47.8% 53.3% -3.61%
2021 45.9% 50.4% -2.2%
2022 43.2% 48.3% 0.01%
2023 43.2% 45.1% -0.36%
2024 44.1% 43.2% -1.05%
2025 44.7% 43.3% -1.9%

Inflation rate by year

Over the past 20 years, the Netherlands has had an average annual inflation rate of 2.27%. In 2024, inflation was 3.35%. The bar chart below shows consumer price inflation by year.

Year Inflation
1960 2.32%
1961 1.31%
1962 2.43%
1963 3.24%
1964 5.82%
1965 3.91%
1966 5.76%
1967 3.46%
1968 3.72%
1969 7.42%
1970 3.67%
1971 7.48%
1972 7.8%
1973 8.02%
1974 9.59%
1975 10.2%
1976 8.83%
1977 6.4%
1978 4.11%
1979 4.2%
1980 6.51%
1981 6.74%
1982 5.91%
1983 2.74%
1984 3.3%
1985 2.26%
1986 0.08%
1987 -0.69%
1988 0.74%
1989 1.08%
1990 2.45%
1991 3.16%
1992 3.18%
1993 2.58%
1994 2.8%
1995 1.92%
1996 1.95%
1997 2.11%
1998 1.96%
1999 2.16%
2000 2.36%
2001 4.16%
2002 3.29%
2003 2.09%
2004 1.26%
2005 1.69%
2006 1.1%
2007 1.61%
2008 2.49%
2009 1.19%
2010 1.28%
2011 2.34%
2012 2.46%
2013 2.51%
2014 0.98%
2015 0.6%
2016 0.32%
2017 1.38%
2018 1.7%
2019 2.63%
2020 1.27%
2021 2.68%
2022 10%
2023 3.84%
2024 3.35%

Balance of trade

Netherlands Rank
Current account balance
$111B
2024
5/189
Current account balance, % of GDP
+9.04%
2024
19/189
Goods imports
$606B
2024
9/188
Goods exports
$693B
2024
6/188
Service imports
$262B
2024
8/188
Service exports
$308B
2024
9/188
Imports of goods and services, % of GDP
72%
2024
29/180
Exports of goods and services, % of GDP
84.1%
2024
14/193

The Netherlands' top 10 trading partners

The Netherlands' biggest trading partner accounting for 18.8%% of all exports and imports is Germany, with a trade balance between the two of +$63.1B — the Netherlands exports $190B worth of goods and services to Germany and imports $127B.

Below is the list of the top 10 trade partners of the Netherlands.

Rank Country Trade value Share of total trade Export to Import from Top export to Top import from
1 Germany $317B 18.8% $190B $127B Machinery & equipment Machinery & equipment
2 Belgium $174B 10.3% $99.1B $75.2B Raw materials & minerals Raw materials & minerals
3 United States $153B 9.07% $59.6B $93.7B Machinery & equipment Machinery & equipment
4 United Kingdom $119B 7.05% $68.3B $50.8B Machinery & equipment Business & finance services
5 France $107B 6.36% $72.8B $34.6B Machinery & equipment Transport & tourism services
6 China $82.5B 4.88% $24.2B $58.3B Machinery & equipment Machinery & equipment
7 Italy $57.6B 3.41% $36.2B $21.4B Machinery & equipment Machinery & equipment
8 Spain $46.7B 2.76% $29.6B $17.1B Machinery & equipment Transport & tourism services
9 Ireland $46B 2.72% $20.6B $25.3B Business & finance services Machinery & equipment
10 Poland $44.5B 2.63% $25.7B $18.8B Machinery & equipment Machinery & equipment

Netherlands' top 10 exports

Netherlands Rank
Machinery & equipment $242B 8/193
Raw materials & minerals $125B 8/193
Chemicals & pharma $122B 8/193
Transport & tourism services $85.5B 8/188
Business & finance services $77.4B 8/188
Processed food, beverages & tobacco $61.2B 2/192
Textiles & consumer goods $44.5B 9/193
IT & IP services $41.6B 9/183
Raw agricultural goods $40.1B 3/193
Metals $35.3B 12/192

Netherlands' top 10 imports

Netherlands Rank
Machinery & equipment $227B 11/193
Raw materials & minerals $130B 7/193
Chemicals & pharma $87.8B 8/193
Transport & tourism services $76.9B 7/188
Business & finance services $69.2B 8/188
Textiles & consumer goods $50.1B 8/193
Processed food, beverages & tobacco $44.7B 5/193
IT & IP services $35.1B 9/182
Metals $32.3B 15/193
Raw agricultural goods $26.7B 4/193

Economic freedom indices

Netherlands Rank
Economic freedom 78.2 11/197
Property rights 95.9 8/182
Government integrity 86.8 8/182
Judicial effectiveness 95.7 8/182
Tax burden 54 175/181
Government spending 41.6 151/180
Fiscal health 94.7 33/181
Business freedom 84.8 14/182
Labor freedom 60.1 66/182
Monetary freedom 74.7 47/180
Trade freedom 79.6 49/181
Investment freedom 90 6/181
Financial freedom 80 8/181

Netherlands' economic freedom by year

The Netherlands is ranked 10/180 for economic freedom with a score of 78.2, compared to 14/163 and a score of 72.9 in 2005.

Economic freedom
Judicial effectiveness
Tax burden
Government spending
Fiscal health
Year Index
Economic freedom Judicial effectiveness Tax burden Government spending Fiscal health
1996 69.7 - 33.8 6.6 -
1997 70.4 - 34.1 14.1 -
1998 69.2 - 36.2 20.7 -
1999 70.2 - 37.1 26.2 -
2000 70.4 - 36.9 28 -
2001 73 - 38.4 25 -
2002 75.1 - 43.6 39.3 -
2003 74.6 - 44.1 35.4 -
2004 74.5 - 45.2 32.3 -
2005 72.9 - 45.7 28 -
2006 75.4 - 48 29.1 -
2007 75.5 - 48.8 34.9 -
2008 77.4 - 51.6 38.2 -
2009 77 - 50.9 36.2 -
2010 75 - 52 38.4 -
2011 74.7 - 50.6 36.8 -
2012 73.3 - 51.2 20.9 -
2013 73.5 - 52.1 24.7 -
2014 74.2 - 51.7 25.6 -
2015 73.7 - 51.8 23.8 -
2016 74.6 - 52.7 34.4 -
2017 75.8 69.9 53.2 37 83
2018 76.2 74.1 52.5 39.1 88.2
2019 76.8 74.7 51.6 42.9 93.3
2020 77 73.9 51.7 45.2 94.1
2021 76.8 72.8 51.7 47.7 95.3
2022 79.5 96.9 51.2 45.4 93.6
2023 78 91 51 37.9 90.8
2024 77.3 96.2 53.1 37.1 88.1
2025 78.2 95.7 54 41.6 94.7

More economic indicators

Netherlands Rank
Services, % of GDP
70.3%
2024
24/191
Industry, % of GDP
17.9%
2024
142/194
Agriculture, forestry, and fishing, % of GDP
1.68%
2024
156/193
GNI, Atlas method
$1.13T
2024
18/194
GNI per capita, PPP
$83,040
2024
9/191
Total reserves including gold
$79.1B
2024
34/177
Net foreign direct investment
$11.1B
2024
15/188
Net inflows of foreign direct investment
-$17.1B
2024
187/193
Net outflows of foreign direct investment
-$5.93B
2024
183/187
Poverty at national poverty lines
14.5%
2021
133/176
Gross capital formation, % of GDP
19.3%
2024
131/176

Compare countries by 7 more topics

GDP per capita map

GDP per capita

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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.

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.