While Gross Domestic Product measures the value of what is produced in the country, Gross National Product measures how much of that value stays in the country. Gross National Product differs from GDP, by Net Factor Income, which for Ireland is mostly an outflow of profits of foreign-owned multinationals here. Show As we saw in GDP, that statistic counts money that is made here but does not stay here. GNP deducts the part that leaves the country and gives a more meaningful indicator of the Irish economy. Gross National Income (GNI) is a similar measure to Gross National Product. The difference between them are the subsidies the European Union (EU) pay to us, and the taxes we pay to them. The EU pay subsidies to Irish producers in activities such as farming, and customs duties are paid to the EU by Irish resident firms and households. These taxes and subsidies are quite small relative to the total, so GNI and GDP are more or less the same, but GNI gives a more precise picture of the national economy. In summary then, Gross National Product (GNP) is:
Gross National Income (GNI) is
After these adjustments, GNP and GNI are largely made up of compensation of employees paid here to workers, profits of Irish-owned enterprises, the consumption of fixed capital on all fixed assets here, Taxes received by the government, and any investment income of enterprises here (such as dividends from overseas subsidiaries). GNP and GNI are calculated as part of National Accounts all around the world and so can be compared between countries. In Ireland we also calculate Modified GNI to give an even more precise indicator of the domestic economy. Gross national income, abbreviated as GNI, is the sum of incomes of residents of an economy in a given period. It is equal to GDP minus primary income payable by resident units to non-resident units, plus primary income receivable from the rest of the world (from non-resident units to resident units). Further information
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Retrieved from "https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Gross_national_income_(GNI)&oldid=551892" The World Bank uses terminology in line with the 1993 System of National Accounts and refers to GNP as "Gross national income" or GNI. GNI measures the total domestic and foreign value added claimed by residents, and comprises GDP plus net receipts of primary income (compensation of employees and property income) from nonresident sources. The World Bank uses GNI per capita in U.S. dollars to classify countries for analytical purposes and to determine borrowing eligibility. Learn more about country classifications. The Gross National Income, GNI, formerly referred to as gross national product (GNP) measures the total domestic and foreign value added claimed by residents at a given period in time, usually a year, expressed in international dollars using purchasing power parity rates. GNI comprises GDP plus net receipts of primary income (compensation of employees and property income) from nonresident sources. GNI provides an aggregate measure of income. An international dollar is defined as the currency unit that has the same purchasing power over GNI as the US dollar in the United States. GNI figures are those estimated by the World Bank from the corresponding ones in the United Nations's systems of National Accounts, expressed in domestic currency. Purchasing power parity conversion factors are estimated by the World Bank based on data collected by the International Comparison Programme (ICP), which is coordinated by the United Nations regional economic commissions and other international organizations. Per capita figures are based on the World Bank's population estimates and projections. While every effort has been made to follow citation style rules, there may be some discrepancies. Please refer to the appropriate style manual or other sources if you have any questions. Select Citation Style Copy CitationShare Share Share to social media Facebook Twitter URL https://www.britannica.com/topic/gross-national-incomeGive Feedback External Websites Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Your Feedback Submit FeedbackThank you for your feedback Our editors will review what you’ve submitted and determine whether to revise the article. External Websites
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Alternate titles: GNI By Peter Bondarenko Edit History Table of ContentsRelated Topics:national income accounting...(Show more) See all related content → gross national income (GNI), the sum of a country’s gross domestic product (GDP) plus net income (positive or negative) from abroad. It represents the value produced by a country’s economy in a given year, regardless of whether the source of the value created is domestic production or receipts from overseas. A country’s GNI will differ significantly from its GDP if the country has large income receipts or outlays from abroad. Those income items may include profits, employee compensation, property income, or taxes. For example, in a country in which many foreign businesses operate, GNI is much smaller than GDP, because the foreign businesses’ profits that are repatriated to the country of origin are counted against the country’s GNI but not against its GDP. GNI, therefore, is a better measure of economic well-being than GDP for countries that have large foreign receivables or outlays. What is included in GDP income?This GDP formula takes the total income generated by the goods and services produced. Total National Income – the sum of all wages, rent, interest, and profits. Sales Taxes – consumer taxes imposed by the government on the sales of goods and services.
What is GDP and GNI?GDP looks at the production level of an economy or the total annual value of what is produced in the nation; it measures an economy's size and growth rate. GNI is the total dollar value of everything produced by a country and the income its residents receive—whether it is earned at home or abroad.
How is GNP calculated?GNP is commonly calculated by taking the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports, and any income earned by residents from overseas investments, then subtracting income earned by foreign residents.
What is included in GNI but not GDP?GNI also includes any product taxes not already counted, minus subsidies. It only counts income earned from residents who work abroad and does not count income earned by foreigners located in the country. Like GDP, it also does not include the shadow or black economy.
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