Which GDP component includes business purchases of capital and new homes?
Answer (1)
This is called gross private investment. It includes businesses buying machines, tools, vehicles, or setting up new factories, and it also includes households buying new houses or apartments. For example, when a call center company in Makati decides to expand its office and buys 50 new computers, that’s investment. Or when a family in Laguna purchases a newly built house, that’s also counted as private investment. These kinds of purchases reflect long-term economic planning and growth.
