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Economics vocabulary · GDP and Growth

Investment

Meaning in economics, with examples

/ɪnˈvestmənt/nounCore term

In economics, investment means: Spending on things that will be used to produce more in the future, such as machines, buildings and software; in GDP data it does not include buying shares.

In Turkish: yatırım

How it is used

One of the four main parts of GDP, next to consumption, government spending and net exports. In national accounts it appears as gross fixed capital formation. In everyday and financial English, investment also means putting money into shares, bonds or property, so check which meaning is intended.

Example sentences

  1. Business investment fell for the third quarter in a row as borrowing costs rose.

  2. Public investment in railways and ports can raise the economy's long-term growth.

Common collocations

  • business investment
  • public investment
  • investment spending
  • boost investment
  • capitalMachines, buildings, tools and other man-made resources used to produce goods and services; in finance the word also means money invested in a business.
  • consumptionThe spending of households on goods and services such as food, clothes, rent and transport; it is usually the largest part of a country's GDP.
  • GDPShort for gross domestic product: the total value of all final goods and services produced within a country in a given period, usually a quarter or a year.
  • foreign direct investmentInvestment by a company from one country that gives it a lasting interest and control in a business in another country, such as building a factory.
  • interest rateThe price of borrowing money, shown as a yearly percentage of the amount borrowed; for savers, it is the return they earn on deposits.

More terms: GDP and Growth

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This page explains English vocabulary for learners. It is not financial advice.