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Gross Domestic Product GDP, Gross National Product GNP, and Gross National Income GNI
Definitions, Examples, and Meaning Explained

 

Gross Domestic Product GDP is the value of goods and services produced within a country during one year. Annual changes in GDP are seen as measures of a country's economic growth.

GDP is the primary measure for identifying and measuring phases of the country's business cycle, such as recession and expansion.

How Do Economists Measure National Economic Production?

Economists refer to several measures of total economic production for individual countries, including Gross Domestic Product (GDP) and Gross National Product (GNP). Another measure seen increasingly is Gross National Income (GNI), essentially an augmented version of GDP.

Gross Domestic Product

Gross domestic product (GDP) is the total market value of all goods and services produced in the country, in a given year or quarter. GDP is equal to all government, consumer, and investment spending, plus the value of exports, minus the value of imports. GDP includes earnings made by foreigners while inside the country. GDP does not include earnings by its residents while outside of the country.

Gross National Income

Gross National Income (GNI) is GDP plus income paid into the country by other countries for such things as interest and dividends (less similar payments paid out to other countries).

Gross National Product

Gross National Product (GNP) is the total market value of all goods and services produced by domestic residents. GNP includes domestic residents earnings from goods and services produced and sold abroad, and investments abroad. GNP does not include earnings by foreign residents while inside the country.

GDP and GNI thus refer to economic income within the borders of the country, while GNP refers to economic output by the country's residents.

GDP is the Primary Indicator of Economic Output

Since the early 1990s, economists and government officials have generally regarded GDP (rather than GNP) as the primary indicator of a country's economic output. Data from the three sources listed below, for example, agree that currently  the annual GDP Growth rate for China is over 9%, while for the United States the rate is about -2.5% (i.e., negative growth).

GDP serves as the primary measure for identifying and measuring phases of the economy's business cycle, such as recession, depression, recovery, and expansion. Economic recession, for instance, is usually defined as two consecutive quarters of GDP decline. (For more on the cycle and these phases, see Business Cycle

GDP, GNI, and GNP Explained

Sections below further explain the measurement and meaning of Gross Domestic Product, Gross National Income, and Gross National Product. Example tables present recent data on Country GDP and GDP per Capita for 100 country economies.


 

Contents

Related Topics

  • For more the well known economic phases recession, depression, recovery, and expansion, see see Business Cycle

Other Resources

Comprehensive GDP, GNI and GNP figures are available from quite a few different sources. Three of the more frequently cited readily accessible sources are:


 

Reporting, Comparing GDP, GNI, GNP

Analysts often compare GDP, GNI and GNP figures …

  • Between quarters and years for a single country or groups of countries, to identify changes and trends in economic growth.
  • Between countries, to show the size of a country's economy relative to other countries or groups of countries.
  • Between countries on a per capita basis, to show the average wealth or poverty of individuals in a country compared to people in other countries.

Those who evaluate economic output figures across time usually prefer figures adjusted to compensate for inflation, so that GDP figures from different time periods accurately reflect changes in real purchasing power. Those who compare economic output figures between countries, of course, need to see all figures expressed in the same currency units. Most data sources use one of the following approaches in reporting financial figures:

  • Without adjustments for inflation and purchasing power.
    This is the nominal or official exchange rate (OER) basis.
  • With adjustments for inflation and purchasing power.
    This is the PPP basis. PPP figures are expressed in International Dollars, which are adjusted to reflect average currency exchange rates and purchasing power parity (PPP).

Determining GDP, GNI, and GNP

Given the definitions of GDP, GNI and GNP above, there are several commonly used approaches to calculating their values. To businesspeople generally, however, the most familiar approach is probably the so-called Expenditure Approach illustrated here.

  • GDP = Consumption + Investment + Government spending + Exports - Imports
  • GNI = GDP + payments by foreign nationals into the country for such things as investments (interest and dividends), less similar payments paid out of the country.
  • GNP = GDP + Net Income Receipts from assets abroad less income of foreign nationals within the country.

Recent GDP Figures Based on PPP and Exchange Rates

Example GDP figures for 100 countries appear in table below. Data are CIA World Fact Book1 estimates for the most recent year available, 2016 (except for Syria and North Korea, for which the estimates represent 2015).

The tables present two figures for each country. The CIA World Fact Book 1 describes these two approaches as follows:

GDP Figures Based on Purchasing Power Parity (PPP)

These entries gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation's GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States in the year noted.

This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries.

GDP Figures Based on Official Exchange Rates.

This entries give the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation's GDP at official exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year.

This measure is simple to compute and gives a precise measure of the value of output. Many economists prefer this measure when gauging the economic power of an economy maintains vis-à-vis its neighbors, judging that an exchange rate captures the purchasing power a nation enjoys in the international marketplace. 

GDP For 100 Countries
PPP Basis And Ecxhange Rate Basis

Figures are from the CIA World Fact Book1 August 2017. Figures represent the most recent year for which data are available, 2016. Countries marked * represent 2015.
B = Billions M =Millions

COUNTRY PPP Basis Intl $ Official Exchg Rate Basis
Country
GDP
GDP
Per Capita
Country
GDP
Afghanistan $64.080 B $2,000 $18.400 B
Albania $33.900 B $11,900 $12.400 B
Algeria $609.400 B $15,000 $168.300 B
Angola $189,000 B $6,800 $91.400 B
Argentina $879.400 B $20,200 $541.700 B
Australia $1,189.000 B $48,800 $1,257.000 B
Austria $416.600 B $47,900 $387.300 B
Bangladesh $628.400 B $3,900 $4.473 B
Belarus $165.400 B $17,500 $48.13 B
Belgium $508.600 B $44,900 $$470.200 B
Belize $3.088 B $8,200 $1.770 B
Bolivia $78.350 B $7,200 $34.040 B
Brazil $3,081.000 B $14,800 $1,770.000 B
Cambodia $58,940 B $3,700 $19.370 B
Canada $1,674.000 B $46,200 $1,532.000 B
Chile $436.100 B $24,000 $234.900 B
China (People's Rep) $21,140.000 B $14,600 $10,730.000 B
Croatia $94.240 B $22,400 $49,860 B
Czech Republic $350.900 B $33,200 $193.500 B
Denmark $264.800 B $46,600 $306.100 B
Egypt $1,105.000 B 412,100 $342.800 B
Estonia $38.700 B $29,500 $23.480 B
Ethiopia $174.700 B $1,900 $69.220 B
Fiji $8.374 B 49,400 $4.556 B
Finland $225.700 $40,600 $239.200 B
France $2,699.000 B $42,400 $2,488.000 B
Germany $3,979.000 B $48,200 $3,495.000 B
Ghana $120.800 B $4,400 $42.760 B
Greece $290.500 B $26,800 $195.900 B
Guatamala $131.800 B $7,900 $68.390 B
Haiti $19.340 B $1,800 $$8.259 B
Hong Kong $427.400 B $58,100 $316.100 B
Hungary $267.600 B $27,200 $117.100 B
Iceland $16.150 B $48,100 $19.440 B
India $8,721.000 B $6,700 $941.000 B
Indonesia $3,028.000 B $11,700 $941.000 B
Iran $1,459.000 B $18,100 $412.300 B
Iraq $596.700 B $16,500 $173.000 B
Ireland $322.000 B $69,400 $307.900 B
Israel $297.000 B $34,800 $311.700 B
Italy $2,221.000 B $36,300 $1,852.000 B
Jamaica $25.390 B $9,000 413.780 B
Japan $4,932.000 B $38,900 $4,730.000 B
Jordan $86.000 B $11,100 439.450 B
Kenya $152.700 B $3,400 $69.170 B
Korea (North) * $40.000 B $1,700 $28.000 B
Korea (South) $1,929.000 B $37,900 $1,411.000 B
Kuwait $301.100 B $71,300 $110.500 B
Latvia $5,6650 B $25,700 $25.020 B
Liechtenstein $4.978 B N/A $6.672 B
LIthuania $85.620 B $29,900 $42.780 B
Luxembourg $58.740 B $102,000 $60.980 B
Macedonia $29.520 B $14,500 $10.490 B
Madagascar $36.860 B $1,500 $9.740 B
Malaysia $863.000 B $27,200 $302.700 B
Mexico $2,307.000 B $18,900 $1,064.000 B
Monaco $7.672 B $115,700 $6.006 B
Mongolia 50,705 B $12,200 $11.160 B
Mozambique $35.010 B $1,200 $12.05 B
Nepal $71.520 B $2,500 $21.15 B
Netherlands $870.800 B $50,800 $773.900 B
New Zealand $174.800 B $37,100 $179.400 B
Nigeria $1,089.000 B $5,900 $7.586 B
Norway $364.700 B $69,300 $376.300 B
Oman $173.100 B $43,700 $59.680 B
Pakistan $988.200 B $5,100 $298.100 B
Panama $93.120 B $22,800 $55.230 B
Peru $410.400 B $13,200 $180.300 B
Philippines $801.900 B $7,700 $311.700 B
Portugal $297.100 B $28,500 $205.900 B
Puerto Rico $131.000 B $37,700 $100.900 B
Qatar $334.500 B $129,700 $156.600
Romania $441.000 B $22,300 $186.500 B
Russia $3,745.000 B $26,100 $1,268.000 B
Saudi Arabia $1,731.000 B $54,100 $637.800 B
Serbia $101.800 B $14,200 $37.530 B
Singapore $487.900 B $87,100 $296.600B
Slovakia $168.800 B $31,200 $90.260 B
Slovenia $68.350 B $33,100 $43.990 B
Somalia $4.719 B $400 $5.925 B
South Africa $739.100 B $13,500 $280.400 B
Spain $1,690.000 B $36,500 $1,252.000 B
Suriname $8.547 B $15,200 $3.251 B
Sweden $498.100 B $49,700 $511.400 B
Switzerland $496.300 B $59,400 $662.500 B
Syria * $50.280 B $2,900 $24.600 B
Taiwan $1,127.000 B $49,500 $519.100 B
Tanzania $150.600 B $3,100 $46.700 B
Thailand $1,161.000 B $16,800 $406.800 B
Tunisia $130.800 B $11,700 $42.390 B
Turkey 41,670.000 B $21,00 $856.800 B
Uganda $84.930 B $2,100 $25.610 B
Ukraine $352.000 B $6,200 $487,200 B
United Arab Emirates $667.000 B $67,700 $375.000 B
United Kingdom $2,788.000 B $42,500 $2,650.000 B
United States $18,560.000 B $57,300 $$18,560.000 B
Uruguay $73.250 B $20,300 $58.500 B
Venezuela $468.600 B $15,100 $333.700 B
Vietnam $594.000 B $6,400 $200.500 B
Zimbabwe $28.330 B $1,700 $14.190 B

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  1. CIA World Fact Book, 2017. Published by the United States Central Intelligence Agency, McLean (Langley), Virginia, USA.
    https://www.cia.gov/library/publications/resources/the-world-factbook/