Gross fixed capital formation

Gross fixed capital formation is just a fancy way of saying the stuff we use to make other stuff.

Let's say you want to build a big building so people can work in it. You need a lot of things to make that building, like cement, bricks, steel beams, and machines to lift everything up. All of these things cost money, and are part of gross fixed capital formation.

But it's not just buildings that count. If you need a computer to do your job, that's part of gross fixed capital formation too. Even if you're a farmer and need a tractor to plow your fields - that's gross fixed capital formation.

Basically, any time we're buying stuff to make something else with it, that counts as gross fixed capital formation. It's an important measure of how much we're investing in the future, because all that stuff we're buying helps us to be more productive and make more things in the long run.