Gross domestic product and agriculture value added 1970 2018

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FAOSTAT ANALYTICAL BRIEF 8

Gross domestic product and agriculture value added

1970–2018

Global and regional trends

Gross Domestic Product and agriculture value added 1970–2018. Global and regional trends.

FAOSTAT Analytical Brief 8

HIGHLIGHTS

Between 1970 and 2018, the annual average growth rate of the global real gross

domestic product (GDP) and agriculture value added reached 3.2 percent and

2.7 percent respectively.

Investment in capital, measured by the real Gross Fixed Capital Formation (GFCF)

as a share of GDP (the investment ratio) remained relatively stable, between

22 percent and 25 percent throughout the period.

Between 2011 and 2018, some regions witnessed a large decrease in the real

GDP growth rates, especially in Africa. The annual average growth rate of the

real GDP of Africa dropped to 2.25 percent from 5.9 percent from 2001 to 2010.

Latin America and Caribbean also saw a significant drop in real GDP growth rate

from 3.15 percent in 2001–2010 to 1.38 percent in 2011–2018 due to the great

economic recession.

FAOSTAT MACRO INDICATORS

GLOBAL AND REGIONAL

Adjusting for inflation, global real GDP increased from USD 18 trillion in 1970 to USD 81.3 trillion

in 2018.1 The average annual growth rate was 3.2 percent, led by Asia and Pacific (6.2 percent),

Africa (3.4 percent), and Latin America and Caribbean (3.0 percent). Real GDP grew at a slower

pace in the other regions: North America (2.8 percent), Europe (2.2 percent), and High Income

countries (2.6 percent) including Australia, Japan and New Zealand (Figure 1 and Table 1).

1 All data relating to total economy, agriculture, forestry and fishing, and manufacturing comes from the United Nations Statistics Division

(UNSD) National Accounts Estimates of Main Aggregates (UNSD NAE) database, which consists of a complete and consistent set of time series of the main national accounts (NA) aggregates of all United Nations Member States and other territories in the world for which national accounts information is available. Series relating to the agriculture sub-industry are obtained from UNSD National Accounts Official Country Data databases, while series on the manufacturing sub-industry (food and beverages; tobacco; food, beverages and tobacco) comes from United Nations Industrial Development Organization (UNIDO) INDSTAT2 databases.

Figure 1. Regional Real GDP, 1970–2018

Source: United Nations Statistics Division (UNSD) and Food and Agriculture Organization of the

United Nations (FAO), 2020.

Table 1: Regional real GDP growth rates, annual average (percent)

1971–1980 1981–1990 1991–2000 2001–2010 2011–2018 1971–2018

Africa 4.35 2.08 2.27 5.90 2.25 3.42

Asia & Pacific 5.80 5.60 6.17 7.29 5.99 6.18

Europe 3.40 3.98 0.35 1.70 1.57 2.23

High Income Countries 4.16 4.24 1.68 1.16 1.44 2.58

Latin America & Caribbean 5.81 1.37 3.16 3.15 1.38 3.04

Northern America 3.26 3.28 3.40 1.76 2.24 2.81

Global 3.86 3.69 2.43 3.02 2.97 3.20

Source: UNSD and FAO, 2020.

Between 1970 and 2018, the global real GDP growth rate had a downward trend from

3.86 percent to 3.20 percent. Europe and High Income Countries especially have had a tardy

recovery after experiencing significant decrease in the period 1990–2000. Europe dropped

significantly to 0.35 percent between 1991–2010, having dropped to -12.81 percent in 1991 due

to the impact of the collapse of the Soviet Union. In High Income Countries, growth slowed in

this period, largely due to Japan, whose annual average growth rate decreased from

4.54 percent between 1981 and 1990 to 1.31 percent between 1991–2000.

Between 2001 and 2010, the Asia and Pacific region experienced the largest growth rate of

7.29 percent. However, it dropped to 5.99 percent in the period 2011–2018 as the growth rate of

Eastern Asia decreased from 9.23 percent to 6.7 percent.

On the other hand, in Africa, the growth rate of real GDP decreased significantly from

5.90 percent between 2001 and 2010 to 2.25 percent between 2011–2018 as North Africa

dropped significantly to -19.3 percent in 2011, although it recovered to “zero” on average in

2018.

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Africa Asia & Pacific Europe High Income Countries Latin America & Caribbean Northern America



Latin America and Caribbean also saw a significant drop in real GDP growth rate from

3.15 percent in 2001–2010 to 1.38 percent in 2011–2018 due to the great economic recession.

(Table 2).

Table 2. Regional real agriculture value added growth rates, annual average (percent)

1971–1980 1981–1990 1991–2000 2001–2010 2011–2018 1971–2018

Africa 1.78 3.28 2.30 6.33 3.06 3.36

Asia & Pacific 2.29 4.80 2.92 3.41 3.47 3.37

Europe 3.33 5.11 -3.62 0.71 1.38 1.38

High Income Countries 0.18 1.63 0.26 -1.02 -1.13 0.03

Latin America & Caribbean 3.11 1.90 2.50 2.87 1.69 2.44

Northern America 0.19 4.59 3.13 1.85 2.46 2.44

Global 2.20 4.19 1.37 2.98 2.84 2.71


From 1970 to 2018, Asia and Pacific’s contribution to global GDP increased greatly from

8 percent to 31.5 percent. Eastern Asia alone contributed 19 percent in 2018, while Europe

shrank from 40 percent to 25.1 percent between 1970 and 2018. Northern America’s

contribution to global real GDP decreased from 31.3 percent in 1970 to 26 percent in 2018. The

contribution of High Income Countries also decreased from 10 percent in 1970 to 7.5 percent in

2018. Finally, the percentage of Latin America, Caribbean and Africa’s global real GDP

remained stable at 7 percent and 3 percent respectively (Figure 2).

Figure 2. Regional contribution to global GDP, 1970–2018


Real GDP per capita increased by 37.5 percent in the last two decades from USD 7 769 in 2000

to USD 10 689 in 2018. This was largely due to the Asia and Pacific region, where it grew from

USD 2 223 in 2000 to USD 5 820 in 2018 (161.7 percent), followed by Africa, where it increased

0%

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45%

1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018


from USD 1 399 in 2000 to USD 1 950 in 2018 (39 percent). Europe witnessed an increase of

31 percent in the real GDP per capita during this period. The other regions witnessed the same

increase of 22 percent in real GDP per capita from 2000 to 2018 (Table 3).

Table 3. Regional real GDP per capita (USD)

1970 1980 1990 2000 2010 2018

Africa 1 238.1 1 447.3 1 338.5 1 398.7 1 929.4 1 950.5

Asia & Pacific 710.4 1 004.5 1 407.0 2 223.0 3 973.0 5 819.6

Europe 7 974.3 10 445.1 14 511.5 20 954.0 24 390.6 27 422.3

High Income Countries 14 954.6 19 949.8 28 269.5 32 147.4 34 931.9 38 759.6

Latin America & Caribbean 4 657.2 6 457.9 6 025.3 6 963.4 8 321.2 8 498.9

Northern America 24 135.6 30 157.7 37 717.0 47 194.7 51 233.1 57 653.8

Global 4 495.9 5 475.2 6 583.9 7 769.1 9 218.0 10 689.0


INVESTMENT DRIVES PER CAPITA GDP GROWTH

High investment growth in Asia and Pacific led to its increased contribution to global GDP.

Investment in capital, measured by the real Gross Fixed Capital Formation (GFCF), was a key

driver of GDP growth, increasing by 400 percent from USD 4.1 trillion to USD 20.7 trillion

between 1970 and 2018, and by 28.5 percent during the last decade from USD 16.1 trillion in

2011. Investment as a share of GDP (the investment ratio) remained relatively stable, between

22 percent and 25 percent, throughout the period from 1970 to 2018.

Figure 3. Regional real GFCF, 1970–2018


The Asia and Pacific region witnessed the highest increase in investment, which grew from

USD 0.27 trillion to USD 9.07 trillion between 1970 and 2018, thus increasing the region’s share

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in global real investment from 6.6 percent to 43.7 percent. The highest share was reached by

Western Asia, with 30 percent in 2018. Investment in Northern America increased from

16.9 percent in 1970 to 21.1 percent in 2018. In contrast, the investment ratio fell in all other

regions (Table 4).

Table 4: Investment ratio (GFCF share of GDP), annual average (percent)

1970–1979 1980–1989 1990–1999 2000–2009 2010–2018 1970–2018

Africa 29 25 20 20 22 23

Asia & Pacific 22 25 26 30 36 27

Europe 26 23 21 21 20 22

High Income 30 28 29 25 24 27

Latin America & Caribbean 25 20 19 19 21 21

Northern America 17 18 19 21 20 19

Global 23 22 22 23 25 23


THE DECLINING CONTRIBUTION OF AGRICULTURE VALUE ADDED TO GDP

Globally and across regions, agriculture value added grew more slowly, leading to a reduced

share of GDP.

Global real agriculture value added rose from USD 0.95 trillion to USD 3.4 trillion between 1970

and 2018, while the sector’s contribution to real GDP fell from 5.3 percent to 4.2 percent in the

same period. This relative decline was due to a faster growth of non-agricultural activities

compared to agriculture. The sector, however, plays a crucial role in the agro-industry value-

chain and in the use of natural resources. In turn, it affects the quality of the environment and

food security beyond what is captured by its contribution to the overall GDP.

Figure 4. Global agriculture value added, and contribution to GDP, 1970–2018


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Agriculture value added Contribution to GDP

In 1970, the Asia and Pacific region, together with Europe, were the main contributors to global

agriculture value added, accounting for 45.5 percent and 20.4 percent, respectively. By 2018,

the contribution of the Asia and Pacific reached 62.2 percent of the sector’s global value added,

driven by the contribution of Eastern Asia (32.5 percent) and Southern Asia (16.5 percent), while

the share for Europe fell notably, to 9.7 percent. The contribution of other regions to global

agriculture value added experienced a limited change from 1970 to 2018: from 8.7 percent to

11.6 percent for Africa, from 8.8 percent to 7.8 percent for Latin America and the Caribbean,

from 7.8 percent to 6.3 percent for Northern America, from 8.8 percent to 2.4 percent for High

Income Countries (Figure 5).

Figure 5. Regional contribution to global agriculture value added, 1970–2018


The global growth rate of the real agriculture value added remained stable between 2000 and

2018 at 2.9 percent. However, Africa witnessed a sharp increase in growth rate in the agriculture

sector between 2000 and 2010. To some extent, this increase follows from the commitments

undertaken with the Maputo Declaration.2 However, a notable decrease was experienced in

2011, reaching -3.84 percent following a decline in Northern Africa (-17.53 percent).

The growth rate in Europe recovered after a long period of negative growth between 1991 and

2000. High Income Countries experienced decreasing growth rates except for 1981–1990

(Figure 6).

2 The Maputo Declaration is an initiative on Agriculture and Food Security and the 10 percent national budget allocation to

agriculture development at the Second Ordinary Assembly of the African Union in 2003.

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1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018




Figure 6. Regional growth rate of real agriculture value added, 1970–2018


A CLOSER LOOK AT AGRICULTURAL VALUE ADDED IN THE LEADING REGION OF ASIA AND THE PACIFIC

China was by far the largest agricultural economy of Asia and the Pacific in 2018, followed by

India, Indonesia and Pakistan (Figure 7). Its agriculture, however, was not always the fastest

growing.

Figure 7. Real agriculture value added share of total agriculture value added in Asia and Pacific in 2018


-6%

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6%

8%

1971–1980 1981–1990 1991–2000 2001–2010 2011–2018

Africa Asia & Pacific Europe High Income Latin America & Caribbean Northern America

China48%

India18%

Indonesia6%

Pakistan3%

Other Asian countries

25%

It is also interesting to observe how growth varied between countries in Asia and the Pacific

through the decades (Figure 8). Four countries have shown accelerated growth, especially in the

1980–1989 period. These countries also experienced substantive growth in recent decades,

while others remained around 2 percent for the entire period.

Figure 8. Real agriculture value added annual average growth rate in Asian countries, 1970–2018


Download data at: http://www.fao.org/faostat/en/#data/MK

EXPLANATORY NOTES

Gross domestic product (GDP), the most frequently quoted indicator of economic

performance, is a comprehensive measure of economic growth, as it measures the total value

added generated within an economy over a specific time period. Value added (VA) is

calculated as Output less Intermediate Consumption. In this article, agriculture includes

forestry and fishing; agriculture GDP refers to value added in this combined sector.

To adjust for inflation, this brief analyses phenomena in constant prices of 2015 US dollars.

Developed regions include Europe, North America and Other Developed Countries.

Real per capita GDP in US dollars is an important economic indicator that enables cross-

country comparisons, particularly in the context of economic development, as it takes into

0% 1% 2% 3% 4% 5% 6%

Other Asian countries

Pakistan

Indonesia

India

China

1970–1979 1980–1989 1990–1999 2000–2010 2010–2018

http://www.fao.org/faostat/en/#data/MK



account differences in population size and growth, and can signal the extent to which

economic growth reflects productivity increases.

Investment in physical capital is measured by the Gross Fixed Capital Formation (GFCF),

which captures the net additions (acquisitions less disposals) to the stock of fixed capital

assets such as machinery, transport equipment, infrastructure and buildings within an

economy. It is a useful indicator to identify and monitor developments in investment trends

over time, particularly as capital accumulation increases the overall productive capacity of an

economy, making large-scale production possible and promoting a greater degree of

specialization.

The FAOSTAT Macro Indicators database provides a selection of country-level

macroeconomic indicators relating to total economy; agriculture, forestry and fishing (AFF);

manufacturing (MAN); agriculture sub-industry (agriculture) and manufacturing sub-industry

(food and beverages; tobacco; food, beverages and tobacco). It releases time series for a

selection of National Accounts variables, including GDP, GFCF, VA, GNI, agriculture sub-

industry VA and gross output. The database also proposes additional indicators such as per

capita GDP, year-on-year growth rates and measures of industry contribution to GDP.

Data are available in both local currency and in US dollars, as well as in current prices and in

constant 2015 prices. The database follows the International Standard Industrial Classification

of All Economic Activities (ISIC).

The territorial coverage consists of 219 countries and territories, including former countries.

FAO compiles aggregate values at regional and global levels. The time coverage is annual

from 1970 to 2018.

All data relating to total economy, agriculture, forestry and fishing, and manufacturing comes

from the United Nations Statistics Division (UNSD) National Accounts Estimates of Main

Aggregates (UNSD NAE) database, which consists of a complete and consistent set of time

series of the main national accounts (NA) aggregates of all United Nations Member States and

other territories in the world for which national accounts information is available. Series relating

to the agriculture sub-industry are obtained from UNSD National Accounts Official Country

Data databases, while series on the manufacturing sub-industry (food and beverages;

tobacco; food, beverages and tobacco) comes from United Nations Industrial Development

Organization (UNIDO) INDSTAT2 databases.

The release calendar is the end of first quarter.

http://www.fao.org/faostat/en/#data

REFERENCES

FAO. 2020. FAOSTAT: Macro Indicators. In: FAO.org [online]. [Cited 15 October 2020]. http://www.fao.org/faostat/en/#data/MK

UNSD. 2020. National Accounts - Analysis of Main Aggregates (AMA). In UN.org [online]. [Cited 15 October 2020]. https://unstats.un.org/unsd/snaama/

This analytical brief was prepared by Eun Jeong Lee and Naglaa ElSodany (FAO Economic Statistics Team) under the supervision

of Piero Conforti, team leader of the Economic Statistics Team, FAO Statistics Division.

Suggested citation: FAO. 2020. Gross Domestic Product and agriculture value added 1970–2018. Global and regional trends.

FAOSTAT Analytical Briefs Series No. 8. Rome.

Cover photo: ©FAO/Djolly Ma

CB1361EN/1/10.20

CONTACTS Statistics - Economic and Social Development E-mail: [email protected] Website: www.fao.org/economic/ess/ess-home/en Food and Agriculture Organization of the United Nations Viale delle Terme di Caracalla 00153 Rome, Italy

http://www.fao.org/faostat/en/#data/MK

https://unstats.un.org/unsd/snaama/

Gross domestic product and agriculture value added 1970 2018

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