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The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (
GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
), plus
factor income Factor Income is the flow of income that is derived from the factors of production, i.e., the general inputs required to produce goods and services. Factor Income on the use of land is called rent, income generated from labor is called wages, and ...
s earned by foreign residents, minus income earned in the domestic economy by nonresidents. Comparing GNI to GDP shows the degree to which a nation's GDP represents domestic or international activity. GNI has gradually replaced GNP in international statistics. While being conceptually identical, it is calculated differently. GNI is the basis of calculation of the largest part of contributions to the
budget of the European Union The Budget of the European Union (EU budget) is used to finance EU funding programmes (such as the European Regional Development Fund, the Cohesion Fund, Horizon Europe, or Erasmus+) and other expenditure at the European level. The EU budget ...
. In February 2017, Ireland's GDP became so distorted from the
base erosion and profit shifting Base erosion and profit shifting (BEPS) refers to corporate tax planning strategies used by multinationals to "shift" profits from higher-tax jurisdictions to lower-tax jurisdictions or no-tax locations where there is little or no economic a ...
("BEPS") tax planning tools of U.S. multinationals, that the
Central Bank of Ireland The Central Bank of Ireland ( ga, Banc Ceannais na hÉireann) is Ireland's central bank, and as such part of the European System of Central Banks (ESCB). It is the country's financial services regulator for most categories of financial firms ...
replaced Irish GDP with a new metric, Irish Modified GNI (or "GNI*"). In 2017, Irish GDP was 162% of Irish Modified GNI.


Comparison of GNI and GDP

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GNI (Atlas method) nominal

Nominal,
Atlas method The Atlas method is a method used by the World Bank since 1993 to estimate the size of economies in terms of gross national income (GNI) in U.S. dollars. A country's GNI in local (national) currency is converted into U.S. dollars using the Atlas co ...
– millions of current
US$ The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
(top 15)


GNI (Atlas method) PPP

PPP – millions of
international dollar The international dollar (int'l dollar or intl dollar, symbols Int'l$., Intl$., Int$), also known as Geary–Khamis dollar (symbols G-K$ or GK$), is a hypothetical unit of currency that has the same purchasing power parity that the U.S. dolla ...
s (top 15)


Gross national product

Gross national product (GNP) is the market value of all the goods and services produced in one year by labor and property supplied by the citizens of a country. Unlike gross domestic product (GDP), which defines production based on the geographical location of production, GNP indicates allocated production based on location of ownership. In fact it calculates income by the location of ownership and residence, and so its name is also the less ambiguous ''gross national income''. GNP is an economic statistic that is equal to GDP plus any income earned by residents from overseas investments minus income earned within the domestic economy by
overseas Overseas may refer to: * ''Overseas'' (album), a 1957 album by pianist Tommy Flanagan and his trio *Overseas (band), an American indie rock band * "Overseas" (song), a 2018 song by American rappers Desiigner and Lil Pump * "Overseas" (Tee Grizzley ...
residents. GNP does not distinguish between qualitative improvements in the state of the technical arts (e.g., increasing computer processing speeds), and quantitative increases in goods (e.g., number of computers produced), and considers both to be forms of "
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
". When a country's capital or labour resources are employed outside its borders, or when a foreign firm is operating in its territory, GDP and GNP can produce different measures of total output. In 2009 for instance, the United States estimated its GDP at $14.119
trillion ''Trillion'' is a number with two distinct definitions: *1,000,000,000,000, i.e. one million million, or (ten to the twelfth power), as defined on the short scale. This is now the meaning in both American and British English. * 1,000,000,000,00 ...
, and its GNP at $14.265 trillion. The term ''gross national income'' (GNI) has gradually replaced the ''Gross national product'' (GNP) in international statistics. While being conceptually identical, the precise calculation method has evolved at the same time as the name change.


Use of GNP

The United States used GNP as its primary measure of total economic activity until 1991, when it began to use GDP. In making the switch, the
Bureau of Economic Analysis The Bureau of Economic Analysis (BEA) of the United States Department of Commerce is a U.S. government agency that provides official macroeconomic and industry statistics, most notably reports about the gross domestic product (GDP) of the United ...
(BEA) noted both that GDP provided an easier comparison of other measures of economic activity in the United States and that "virtually all other countries have already adopted GDP as their primary measure of production". Many economists have questioned how meaningful GNP or GDP is as a measure of a nation's economic well-being, as it does not count most
unpaid work Unpaid labor or unpaid work is defined as labor or work that does not receive any direct remuneration. This is a form of non-market work which can fall into one of two categories: (1) unpaid work that is placed within the production boundary of ...
and counts much economic activity that is unproductive or actually destructive.


GNI vs GDP

While GDP measures the market value of all final goods and services produced in a given country, GNI measures income generated by the country's citizens, regardless of the geographic location of the income. In many states, those two figures are close, as the difference between income received by the country versus payments made to the rest of the world is not significant. According to the World Bank, the GNI of the US in 2016 was 1.5% higher than GDP. In developing countries, on the other hand, the difference might be significant due to a large amount of foreign aid and capital inflow. In 2016, the GNI of
Armenia Armenia (), , group=pron officially the Republic of Armenia,, is a landlocked country in the Armenian Highlands of Western Asia.The UNbr>classification of world regions places Armenia in Western Asia; the CIA World Factbook , , and ''Ox ...
was 4.45% higher than GDP. Based on the OECD reports, in 2015 alone, Armenia has received a total of US$409 million development assistance. Over the past 25 years,
USAID The United States Agency for International Development (USAID) is an independent agency of the U.S. federal government that is primarily responsible for administering civilian foreign aid and development assistance. With a budget of over $27 bi ...
has provided more than one billion USD to improve the living of the people in Armenia. GNI equals GDP plus wages, salaries, and property income of the country's residents earned abroad that also constitutes the higher GNI figure. According to the UN report on migration from Armenia in 2015–17, every year around 15–20 thousand people leave Armenia permanently, and roughly 47% of those are working migrants that leave the country to earn income and sustain the families left in Armenia. In 2016 Armenian residents received in a total of around $150 million remittances. Armenia's Gni, measured in US dollars, amounted to USD 13.5 billion in 2021, according to the National Statistical Office. This is an 8.23% increase over the prior year.GNI in USD terms in Armenia has historically ranged from a record high of USD 13.8 billion in 2019 to a record low of USD 1.06 billion in 1992. Regarding interest rates on GNI expressed in USD, Armenia is ranked 119th out of the 155 nations we monitor.


See also

*
Net national income In national income accounting, net national income (NNI) is net national product (NNP) minus indirect taxes. Net national income encompasses the income of households, businesses, and the government. Net national income is defined as gross domestic ...
* Measures of national income and output *
Gross national income in the European Union Gross national income at market prices in the European Union of 27 Member States (GNI) amounted to EUR 44.778 per inhabitant in 2020. In 2007, the highest per capita GNI measured i purchasing power standards (PPS)was recorded for Luxembourg (mor ...
* List of countries by GNI (nominal) per capita *
National average salary The national average salary (or national average wage) is the mean salary for the working population of a nation. It is calculated by summing all the annual salaries of all persons in work and dividing the total by the number of workers. It is no ...
* Gross domestic product (GDP) * Irish modified GNI (or GNI*) * List of U.S. states by adjusted per capita personal income


References

{{Authority control Gross domestic product