Poverty and Social
Key Economic Ratios
Long-Term Trends
Structure of the Economy
Prices and Government Finance
Trade
Balance of Payments
External Debt

Development diamond

The development diamond portrays four selected socioeconomic indicators for a given country compared to the corresponding averages for the income group to which the country belongs. The averages for the income group form a reference diamond, scaled in such a way that the average values of the four indicators are equal. Any point outside the reference diamond indicates the country's position exceeding the group average, while any point inside represents the country's position below the group average. When data are not available, the diamond is incomplete.

The group averages for gross primary enrollment, access to safe water, and GNI per capita are weighted by individual countries' population. The group average for life expectancy is weighted by the number of live births.

Economic ratios diamond

The economic ratios diamond portrays four selected economic indicators for a given country compared to the corresponding averages for the income group to which the country belongs. The averages for the income group form a reference diamond, scaled in such a way that the average values of the four indicators are equal. Any point outside the reference diamond indicates the country's position exceeding the group average, while any point inside represents the country's position below the group average. When data are not available, the diamond is incomplete.

The group averages for the four economic ratios are weighted by GNI in U.S. dollars. Savings is gross domestic savings measured as a share of GDP. Investment is gross domestic investment measured as a share of GDP. Trade is the sum of exports and imports of goods and services measured as a share of GDP. Indebtedness is the ratio of present value of debt to exports. Exports include goods, services, income, and workers' remittances.

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Poverty and Social

Population is a World Bank estimate for mid-year population, based, in most cases, on a de facto definition, which counts all residents regardless of legal status or citizenship. Note, however, that refugees not permanently settled in the country of asylum are generally considered to be part of the population of their country of origin. Population numbers are either current census data or historical census data extrapolated through certain demographic models. The average annual growth rate is computed from end-point data using an exponential growth model. The equation is r = ln(p_n/p₁)/n where p_n and p₁ are the last and first observations in the period, n is the number of years in the period, and ln is the natural logarithm operator.

GNI per capita is the gross national income (GNI) in current U.S. dollars as divided by the mid-year population. GNI measures the total domestic and foreign income claimed by the residents of the economy. It comprises GDP plus net factor income from abroad, which is the income residents receive from abroad for factor services (labor and capital) less similar payments made to non-residents who contributed to the domestic production. GNI in U.S. dollars is calculated according to the World Bank Atlas method of conversion from national currency to U.S. dollar terms.

The Atlas conversion factor for any year is the average of the country's exchange rate for that year and those for the two preceding years, adjusted for differences in relative inflation between the country and the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States). This three-year average smoothes fluctuations in prices and exchange rates for each country.

Labor force comprises people who meet the ILO definition of the economically active population: all people who supply labor for the production of goods and services during a specified period. It includes both the employed and the unemployed. While national practices vary in the treatment of such groups as the armed forces and seasonal or part-time workers, in general the labor force includes the armed forces, the unemployed, and first-time job-seekers, but excludes homemakers and other unpaid caregivers and workers in the informal sector. The average annual growth rate is computed from end-point data using an exponential growth model. The equation is r = ln(p_n/p₁)/n where p_n and p₁ are the last and first observations in the period, n is the number of years in the period, and ln is the natural logarithm operator.

Poverty shows the percentage of the population living below the national poverty line. National estimates are based on population-weighted subgroup estimates from household surveys.

Urban population is the proportion of the population residing in urban areas as reported to the United Nations. Estimates are based on different national definitions of what constitutes the urban area. Cross-country comparisons should be made with caution.

Life expectancy at birth is the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life.

Infant mortality shows the number of deaths of infants under one year of age per 1,000 live births in a given year.

Child malnutrition shows the percentage of children under five whose weight for age is less than minus two standard deviations from the median for the international reference population aged 0-59 months. The reference population, adopted by the WHO in 1983, is based on children from the United States, who are assumed to be well nourished.

Access to an improved water source shows the percentage of the population with reasonable access to an adequate amount of safe water (including treated surface water and untreated but uncontaminated water, such as from springs, sanitary wells, and protected boreholes). In urban areas the source may be a public fountain or standpipe located not more than 200 meters away. In rural areas the definition implies that members of the household do not have to spend a disproportionate part of the day fetching water. An adequate amount of safe water is that needed to satisfy metabolic, hygienic, and domestic requirements—usually about 20 liters a person a day. The definition of safe water has changed over time.

Illiteracy shows the proportion of the population 15 years of age and older who cannot, with understanding, both read and write a short simple statement on everyday life.

Gross primary enrollment is the ratio of total enrollment, regardless of age, to the population of the age group that officially corresponds to the primary education level. Estimates are based on the International Standard Classification of Education (ICSED). Primary education provides children with basic reading, writing, and mathematics skills along with an elementary understanding of such subjects as history, geography, natural science, social science, art, and music.

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Key Economic Ratios

Gross domestic product (GDP) measures the total output of goods and services for final use occurring within the domestic territory of a given country, regardless of the allocation to domestic and foreign claims. Gross domestic product at purchaser values (market prices) is the sum of gross value added by all resident and nonresident producers in the economy plus any taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. National currency GDP is converted into U.S. dollars at the relevant year's conversion rate (see the Balance of Payments section below).

The following four indicators are presented as the percentage share of GDP in national currency at current purchaser prices:

Gross domestic investment consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories. Fixed assets include land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including commercial and industrial buildings, offices, schools, hospitals, and private residential dwellings. Inventories are stocks of goods held by firms to meet temporary or unexpected fluctuations in production or sales.

Exports of goods and services represent the value of all goods and other market services provided to the world. Included is the value of merchandise, freight, insurance, travel, and other nonfactor services. Factor and property income (formerly called factor services), such as investment income, interest, and labor income, is excluded.

Gross domestic savings are calculated as the difference between GDP and total consumption. Total consumption expenditures cover the consumption by households and the general government.

Gross national savings is gross domestic savings plus net income and net current private transfers from abroad.

The following five indicators show either the percentage ratio to GDP (GNI for present value of debt) or the percentage ratio to exports, computed from data expressed in current U.S. dollars. National currency GDP (and GNP) is converted into U.S. dollars at the relevant year's exchange rate. Exports include goods, services, income, and workers' remittances:

Current account balance is the sum of net trade (exports minus imports) in goods, services, and income plus net current transfers. The current account balance shown here is from the balance of payments and excludes net official capital transfers.

Interest payments are the amounts of interest on long-term external debts, actually paid in foreign currency, goods, or services in the year specified. Interest due but not paid is excluded. The source is the World Bank Debtor Reporting System (DRS).

Total debt is the total debt stocks of public and publicly guaranteed long-term debt, private nonguaranteed long-term debt, the use of IMF credit, and short-term debt, all disbursed and outstanding at year-end. For further details, please see the External Debt and Resource Flows section below. The source is the World Bank Debtor Reporting System (DRS).

Total debt service is comprised of debt service payments on total long-term debt (public and publicly guaranteed and private nonguaranteed), use of IMF credit, and interest on short-term debt. Long-term debt service payments (LTDS) are the sum of principal repayments and interest payments in the year specified. The source is the World Bank Debtor Reporting System (DRS).

Present value of debt is the discounted sum of all debt service payments due over the life of existing loans. The discount rates used are the interest rates charged by the OECD countries for officially supported export credits. The rates are specified for G7 currencies -- British pounds, Canadian dollars, French francs, German marks, Italian lire, Japanese yen, and U.S. dollars. IBRD loans and IDA credits are discounted by the most recent IBRD lending rate, and IMF loans are discounted by the SDR lending rate. For debt denominated in other currencies, discount rates are the average of interest rates on export credits charged by other OECD countries. For variable rate loans, for which the future debt service payments cannot be precisely determined, debt service is calculated using the end-1999 rates for the base period specified for the loan. The source is the World Bank Debtor Reporting System (DRS). Exports include goods, services, income, and workers' remittances.

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Long-Term Trends

Growth rates are computed from time series expressed in constant local prices. Long-term average growth rates are calculated using the least-squares method. See above definitions for GDP, GNI, and exports of goods and services.

GNI per capita growth rate uses gross national product in constant local currency as divided by the mid-year population.

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Structure of the Economy

Percentage ratios of GDP are computed from current price data in national currency. Production sector shares show the percentage share of GDP at either basic (producer) prices or purchaser (market) prices, depending on the valuation used by the country. Expenditure component shares are computed with respect to GDP in purchaser prices.

Growth rates are computed from time series expressed in constant local prices. Long-term average growth rates are calculated using the least-squares method. See above definitions for gross domestic investment and gross national product.

Agriculture measures the output of the agricultural sector (ISIC divisions 1-5) less the value of intermediate inputs. Agriculture comprises value added from forestry, hunting, and fishing as well as cultivation of crops and livestock production. Data are in current local currency. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The industrial origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 2.

Industry corresponds to ISIC divisions 10-45 and includes manufacturing (ISIC divisions 15-37). It comprises value added in mining, manufacturing (also reported as a separate subgroup), construction, electricity, water, and gas. Data are in current local currency. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The industrial origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 2.

Manufacturing refers to industries belonging to divisions 15-37 in the International Standard Industrial Classification, rev. 2. Value added in manufacturing is the sum of gross output, less the value of intermediate goods consumed in production. Data are in current local currency. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The industrial origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 2.

Services correspond to ISIC divisions 50-99. They include value added in wholesale and retail trade (including hotels and restaurants), transport, and government, financial, professional, and personal services such as education, health care, and real estate services. Also included are imputed bank service charges, import duties, and any statistical discrepancies noted by national compilers as well as discrepancies arising from rescaling. Data are in current local currency. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The industrial origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 2.

Private consumption is the market value of all goods and services, including durable products (such as cars, washing machines, and home computers) purchased or received as income in kind by households and nonprofit institutions. It excludes purchases of dwellings but includes imputed rent for owner-occupied dwellings. This estimate of private consumption includes any statistical discrepancy in the use of resources.

General government consumption includes all current spending for purchases of goods and services (including wages and salaries) by all levels of government, excluding most government enterprises. It also includes most expenditures on national defense and security.

Imports of goods and services represent the value of all goods and other market services provided to the world. Included is the value of merchandise, freight, insurance, travel, and other nonfactor services. Factor and property income (formerly called factor services), such as investment income, interest, and labor income, is excluded.

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Prices and Government Finance

Consumer prices refer to the price index of goods and services used for private final consumption of households. It reflects the change in the cost to the average consumer of acquiring a fixed basket of goods and services. In general, a Laspeyres index formula is used.

Implicit GDP deflator is the ratio of GDP in current prices to GDP in constant prices.

Current revenue includes all revenue from taxes and nonrepayable receipts (other than grants) from the sale of land, intangible assets, government stocks or fixed capital assets, or from capital transfers from nongovernmental sources. It also includes inheritance taxes and nonrecurrent levies on capital.

Current budget balance is the excess of current revenue over current expenditure. Current expenditure includes requited payments other than for capital assets or for goods or services to be used in the production of capital assets, and unrequited payments for purposes other than permitting the recipients to acquire capital assets, compensating the recipients for damage or destruction of capital assets, or increasing the financial capital of the recipients.

Overall surplus/deficit is current and capital revenue and official grants received, less total expenditure and lending minus repayments.

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Trade

Total exports shows the f.o.b. (free on board) value of goods provided to the rest of the world. They are classified using the Standard International Trade Classification (SITC), series M, no. 34, revision 2.

Total imports shows the c.i.f. (cost, insurance, and freight) value of goods received from the rest of the world. Merchandise imports are classified using the Standard International Trade Classification (SITC), series M, no. 34, rev. 2.

Food comprises the commodities in SITC sections 0 (food and live animals), 1 (beverages and tobacco), and 4 (animal and vegetable oils and fats) and SITC division 22 (oil seeds, oil nuts, and oil kernels).

Agricultural raw materials comprise SITC section 2 (crude materials except fuels) excluding divisions 22, 27 (crude fertilizers and minerals excluding coal, petroleum, and precious stones), and 28 (metalliferous ores and scrap).

Fuels comprise SITC section 3 (mineral fuels).

Ores and metals comprise the commodities in SITC divisions 27, 28, and 68 (nonferrous metals).

Manufactures comprise the commodities in SITC sections 5 (chemicals), 6 (basic manufactures), 7 (machinery and transport equipment), and 8 (miscellaneous manufactured goods), excluding division 68.

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Balance of Payments

See the definitions under Key Ratios for exports and imports of goods and services, and current account balance.

Resource balance shows exports of goods and services less imports of goods and services.

Net income refers to employee compensation paid to nonresident workers and investment income (receipts and payments on direct investment, portfolio investment, other investments, and receipts on reserve assets). Income derived from the use of intangible assets is excluded from income and recorded under business services.

Net current transfers are recorded in the balance of payments whenever an economy provides or receives goods, services, income, or financial items without a quid pro quo. All transfers not considered to be capital are current.

Financing items are net capital transactions, such as net capital transfers, and net financing flows, such as net investment inflows and net borrowings. This line is derived as a residual (financing items plus current account balance plus changes in net reserves should equal zero).

Changes in net reserves is the net change in a country's holdings of international reserves resulting from transactions on the current, capital, and financial accounts. These include changes in holdings of monetary gold, SDRs, foreign exchange assets, reserve position in the International Monetary Fund, and other claims on nonresidents that are available to the central authority. The measure is net of liabilities constituting foreign authorities' reserves, and counterpart items for valuation changes and exceptional financing items.

Reserves including gold comprise holdings of monetary gold, special drawing rights, the reserve position of members in the International Monetary Fund (IMF), and holdings of foreign exchange under the control of monetary authorities. The gold component of these reserves is valued at year-end (December 31) London prices.

For most countries, conversion rate is the official exchange rate as reported in the International Financial Statistics (line rf/wf -- period average), expressed in units of national currency per U.S. dollar. However, where the official exchange rate is judged to diverge by an exceptionally large margin from the rate effectively applied to domestic transactions of foreign exchange and internationally traded products, a Bank-staff estimated exchange rate is used.

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External Debt and Resource Flows

Total debt outstanding and disbursed is the sum of public and publicly guaranteed long-term debt, private nonguaranteed long-term debt, the use of IMF credit, and short-term debt, all disbursed and outstanding at year-end.

Long-term external debt is defined as debt that has an original or extended maturity of more than one year and that is owed to nonresidents and repayable in foreign currency, goods, or services. Long-term debt has three components: public debt, which is an external obligation of a public debtor, including the national government, a political subdivision (or an agency of either), and autonomous public bodies; publicly guaranteed debt, which is an external obligation of a private debtor that is guaranteed for repayment by a public entity; and private nonguaranteed debt, which is an external obligation of a private debtor that is not guaranteed for repayment by a public entity.

The chart for composition of total debt breaks down public debt into other multilateral— loans and credits from regional development banks and other multilateral and intergovernmental agencies, excluding the World Bank— and bilateral— loans from governments and their agencies (including central banks), loans from autonomous bodies, and direct loans from official export credit agencies. The chart shows as private, the sum of publicly guaranteed debt and private nonguaranteed debt.

Use of IMF credit denotes repurchase obligations to the IMF with respect to all uses of IMF resources (excluding those resulting from drawings in the reserve tranche) shown for the end of the year specified. Use of IMF credits comprises purchases outstanding under the credit tranches, including enlarged access resources and all special facilities (the buffer stock, compensatory financing, extended fund, and oil facilities), trust fund loans, and operations under the structural adjustment and enhanced structural adjustment facilities. Data are from the Treasurer's Department of the IMF. IMF purchases are total drawings on the general resources account of the IMF during the year specified, excluding drawings in the reserve tranche. IMF repurchases are total repayments of outstanding drawings from the general resources account during the year specified, excluding repayments due in the reserve tranche.

To maintain comparability between data on transactions with the IMF and data on long-term debt, use of IMF credit outstanding at year end (stock) is converted to dollars at the SDR exchange rate in effect at the end of year. Purchases and repurchases (flows) are converted at the average SDR exchange rate for the year in which transactions take place.

Net purchases does not usually reconcile changes in the use of IMF credit from year to year. Valuation effects from the use of different exchange rates frequently explain much of the difference, but not all. Other factors are increases in quotas (which expand a country's reserve tranche and can thereby lower the use of IMF credit as defined here), approved purchases of a country's currency by another member country drawing on the general resources account, and various administrative uses of a country's currency by the IMF.

Short-term debt is defined as debt that has an original maturity of one year or less. Available data permit no distinction between public and private nonguaranteed short-term debt. Short-term debt includes interest in arrears on long-term debt, which is interest payment due but not paid, on a cumulative basis.

The source is the World Bank Debtor Reporting System (DRS).

Total debt outstanding and disbursed from the International Bank for Reconstruction and Development (IBRD) is nonconcessional. Nonconcessional debt excludes loans with an original grant element of 25 percent or more.

Total debt outstanding and disbursed from the International Development Association (IDA) is concessional. Concessional debt is defined as loans with an original grant element of 25 percent or more. The grant equivalent of a loan is its commitment (present) value, less the discounted present value of its contractual debt service; conventionally, future service payments are discounted at 10 percent. The grant element of a loan is the grant equivalent expressed as a percentage of the amount committed. It is used as a measure of the overall cost of borrowing.

Total debt service is comprised of debt service payments on total long-term debt (public and publicly guaranteed and private nonguaranteed), use of IMF credit, and interest on short-term debt. Long-term debt service payments (LTDS) are the sum of principal repayments and interest payments in the year specified.

Debt service from the International Bank for Reconstruction and Development (IBRD) is nonconcessional. Debt service from the International Development Association (IDA) is concessional.

Official grants are defined as legally binding commitments that obligate a specific value of funds available for disbursement, for which there is no repayment requirement. Technical cooperation grants are excluded. [Technical cooperation grants include: free-standing technical cooperation grants, which are intended to finance the transfer of technical and managerial skills, or of technology, for the purpose of building up general national capacity without reference to any specific investment projects; and investment-related technical cooperation grants, which are provided to strengthen the capacity to execute specific investment projects.]

Net flows on public and publicly guaranteed debt from official creditors include loans from international organizations (multilateral loans) and loans from governments (bilateral loans). Loans from international organizations include loans and credits from the World Bank, regional development banks, and other multilateral and intergovernmental agencies. Excluded are loans from funds administered by an international organization on behalf of a single donor government; these are classified as loans from governments. Government loans include loans from governments and their agencies (including central banks), loans from autonomous bodies, and direct loans from official export credit agencies. Net flows (or net lending or net disbursements) are disbursements minus principal repayments.

Private creditors include public and publicly guaranteed private creditors and private nonguaranteed creditors. Net flows on public and publicly guaranteed debt from private creditors include bonds that are either publicly issued or privately placed; commercial bank loans from private banks and other private financial institutions; and other private credits from manufacturers, exporters and other suppliers of goods, and bank credits covered by a guarantee of an export credit agency. Net flows on private nonguaranteed external debt are external obligations of private debtors that are not guaranteed for repayment by public entities.

Foreign direct investment (FDI) is net direct investment that is made to acquire a lasting management interest (usually 10 percent of voting stock) in an enterprise operating in a country other than that of the investor (defined according to residency). The investor's purpose is to be an effective voice in the management of the enterprise. FDI is the sum of net equity capital, net reinvestment of earnings, net other long-term capital, and net short-term capital as shown in the balance of payments.

Portfolio equity is the sum of country funds, depository receipts (American or global), and direct purchases of shares by foreign investors.

World Bank program:

Commitments are the sum of new commitments on public and publicly guaranteed loans from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Commitments are the total amount of loans for which contracts were signed in the year specified.

Disbursements are the sum of the drawings on public and publicly guaranteed debt, committed during the year, from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

Principal repayments are the sum of principal repaid on public and publicly guaranteed debt outstanding from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

Net flows are the sum of net flows on public and publicly guaranteed debt outstanding from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Net flows (or net lending or net disbursements) are disbursements minus principal repayments.

Interest payments are the sum of the interest paid on the public and publicly guaranteed debt outstanding from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Interest payments are actual amounts of interest paid in foreign currency, goods, or services in the year specified.

Net transfers are the sum of net transfers on public and publicly guaranteed debt outstanding from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Net transfers are net flows minus interest payments (or disbursements minus total debt service payments).