Projections are based on information regarding mortality rates, fertility trends, and net external migration. Alternatively, GDP can be thought of as the sum of value added in production at each successive stage of the production-marketing chain. Fixed assets cover land improvements, plant, machinery, and equipment purchases, and infrastructure development and maintenance. Inventories are stocks of goods held by firms to meet temporary or unexpected fluctuations in production or sales. By adding to capital stock, investment increases an economy's capacity to grow over time.
Investment is financed by savings, either national or foreign.
Gross National Savings are calculated as the difference between GNP and total consumption. Foreign Savings are equivalent to the deficit in the current account of the balance of payments. It is equal to the ratio of nominal GDP to real GDP multiplied by 100. The ratio of nominal GDP to real GDP is the GDP deflator. The GDP deflator is the broadest based price index available-it is considered by many to be the best overall indicator of inflationary pressures in an economy.