The average propensity to import (APM) is the percentage of a nation’s total income that is spent on imported goods and services. It shows how much an economy relies on imports compared to its total income.

Formula: APM = Total imports / Total national income (M / Y)

Key features:

• APM shows the overall import intensity of an economy.
• A higher APM means the country depends more on foreign goods, making it more sensitive to changes in global markets.
• APM is usually stable, but it often rises as a country develops because citizens demand a wider variety of goods.
• It helps economists compare different countries by showing how much domestic money flows to foreign markets.
• APM shows the current level of spending on imports but does not show how spending changes when income increases (for that, see MPM).
• Imports are considered a leakage from the economy, meaning money spent on imports does not contribute to domestic production and income growth.