GDP (Gross Domestic Product) vs GNP (Gross National Product) — Difference (with Table & FAQs)
GDP (Gross Domestic Product) vs GNP (Gross National Product) — a 7-row comparison table, 4 key points and 3 exam FAQs. Class 11-12 Social Science.
TL;DR: GDP (Gross Domestic Product) vs GNP (Gross National Product) — a 7-row comparison table, 4 key points and 3 exam FAQs. Class 11-12 Social Science.
Written & reviewed by the Syllab.in Academic Team (CBSE/NCERT subject experts) · Updated
The main difference between GDP (Gross Domestic Product) and GNP (Gross National Product): GDP measures the value of goods and services produced within a country's borders, while GNP includes value produced by nationals regardless of location. Th
GDP (Gross Domestic Product) vs GNP (Gross National Product) — Comparison Table
| Basis | GDP (Gross Domestic Product) | GNP (Gross National Product) |
|---|---|---|
| Definition | Value of all goods/services in a country | Value produced by nationals worldwide |
| Geographic focus | Within national borders | Regardless of location |
| Includes | Foreign nationals working in country | Only citizens regardless of location |
| Excludes | Citizens working abroad | Foreign nationals in the country |
| Calculation | Production within territorial boundaries | Production by nationals abroad minus production by foreigners |
| Usage | More commonly used for economic comparison | Less commonly used now |
| Formula | GDP = GNP - NFIA | GNP = GDP + NFIA |
Key Points
- GDP is territorial; GNP is national and includes diaspora income
- For countries with significant foreign workers, GDP is higher than GNP
- For countries whose citizens work abroad, GNP is higher than GDP
- GDP is now preferred by international organizations for economic comparison
Frequently Asked Questions
What is the difference between GDP and GNP?
Gross Domestic Product counts the value of everything produced inside a country's borders, whoever owns the business. Gross National Product counts what is produced by a country's residents, wherever in the world they produce it.
How do you get from one to the other?
GNP equals GDP plus income earned by residents abroad, minus income earned within the country by non-residents. That adjustment is called net factor income from abroad.
Which does India use as its headline measure?
GDP is the figure normally quoted for growth, because it measures activity within the country. GNP matters more when a large share of national income comes from citizens working overseas.