03 August 2009

Gross fixed capital formation consists of fixed assets acquired for longer term use in the production of goods and services. Fluctuations in the share of gross fixed capital formation in GDP are considered to anticipate future business activity. The investment rate started to decrease in the United States already in 2007, whilst in the EU the downturn did not happen until 2008. Among the CIS countries, the average investment rate stayed at the level of the previous year in 2008. The economic crisis unfolded in the same order: first in the United States, then in the EU countries, followed by the CIS countries by end-2008.

Since 2003 the average gross investment rate in the CIS countries has been significantly higher than in the EU and the United States. The highest investment rates, even more than 50% of GDP, were seen in Azerbaijan as a result of building up capacity for oil and gas production. Regardless of the need for investment to replace old capital in the CIS countries, their investment rates are expected to decline due to the credit and funding difficulties of enterprises. The impact of the current economic crisis on the investment is likely to be even more evident in the EU and the United States.

* Average of countries in the country group. No data for Turkmenistan and Uzbekistan.

Source: UNECE Statistical Database, Eurostat and national statistics