THE ROLE OF CAPITAL FORMATION IN ECONOMIC DEVELOPMENT

Countries need capital to replace old equipment used to produce goods and services. If a country is unable to replace capital goods as existing capital reaches the end of its useful life, then production declines. As a general rule, the higher the capital formation of an economy, the faster the economy will increase its aggregate income. Because the production of more goods and services will lead to an increase in the level of national income. The article discusses the role of capital in the country's economy. The importance of capital and the economic policy conducted in this direction is emphasized in the development of foreign countries. An analysis was made based on the macroeconomic indicators of the first quarter of 2023 in Azerbaijan. It is clear from the analysis that the state attaches importance to this field in our country. In January-March 2023, the gross domestic product of 30.3 billion manats was produced by enterprises, organizations and individual entrepreneurs operating in the country, and funds in the amount of 3523.1 million manats were directed to the fixed capital. As a result of this, new industrial parks with modern capital are operating in our country, and new industrial parks are currently being built in the territories freed from occupation.