# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Gross National Product (GNP)

Updated August 22, 2020

What Is Gross National Product (GNP)?

Gross national product (GNP) is the sum of all domestic and foreign output created by citizens of a given country. It can be measured by spending or by income. GNP includes activities by citizens and companies abroad, but excludes activities by foreigners within the country.


GDP (or gross domestic product) is another common metric that’s used to measure the economic activity of a country. The main difference between GDP and GNP is that GDP is limited to activity within a country’s borders. Here’s a quick breakdown on how the two compare:



Net national product (NNP) is another economic indicator that is similar to GNP. However, the main difference is that it also considers the loss in value of physical capital. In other words, net national product is gross national product minus depreciation.


Gross national income (GNI) also measures the amount of money earned by a nation's people and businesses. However, the main difference between GNI and GNP is that GNI measures income rather than output. It is calculated by adding foreign income earned by citizens to GDP and subtracting domestically generated income sent to foreign citizens.

How to Calculate GNP

Gross national product is an economic indicator that measures the total value of all goods and services produced by a country's residents, regardless of production location. It consists of gross domestic product plus income earned by foreign residents living abroad (minus domestic income generated by non-residents).

What Is the Gross National Product Formula?

Gross National Product (GNP) Formula

Example of GNP

Assume that Country ABC spends a total of $100 million on consumption, $75 million on investments, and $200 million on government expenditure. Additionally, the country spends $50 million on imports and sells $25 million of exports. 

Country ABC also has multiple citizens and businesses in foreign countries who generate another $150 million in income. The foreign businesses that operate within the country earn $50 million, which is sent back to their home countries. 

Using the formula above, we can calculate the GNP for Country ABC:

GNP = C + I + G + X + Z


Consumption = $100 million

Investments = $75 million

Government expenditure = $200 million

X [Net Exports (Value of exports - value of imports)] = -$25 million

Z [Net Income (Net income inflows from abroad - net income outflows)] = $100 million

GNP = 100m + 75m + 200m + -25m + 100m = $450 million

Therefore, we can conclude that Country ABC’s GNP is $450 million.

GNP Per Capita Examples

At the end of 2019, the United States’ GNP was $21.85 trillion and its population was 329.45 million. Using the formula above, we can calculate the GNP per capita for 2019:

GNP Per Capita 2019 Example

Therefore, we can conclude that the 2019 US GNP per capita was $66,322.66.

Why Is GNP Important?

Unlike GDP—which focuses on the output created within the borders of a country—GNP measures the output generated by its citizens, regardless of their location. Since residents now have more opportunities to earn money from both domestic and foreign sources, GNP is a more accurate indicator of average productivity.

However, the two measures are often used together. A large gap between GDP and GNP indicates significant involvement in international trade and finance or that a large proportion of citizens live and work abroad, whereas a small gap indicates that most output is generated within the country’s borders.

Ask an Expert about Gross National Product (GNP)
At InvestingAnswers, all of our content is verified for accuracy by Rachel Siegel, CFA and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Gross National Product (GNP).
Be the first to ask a question

If you have a question about Gross National Product (GNP), then please ask Rachel.

Ask a question
Rachel Siegel, CFA
CFA logo

CFA Charterholder

Chartered Financial Analyst

Rachel Siegel, CFA is one of the nation's leading experts at ensuring the accuracy of financial and economic text.  Her prestigious background includes over 10 years of experience in creating professional financial certification exams and another 20 years of college-level teaching.

If you have a question about Gross National Product (GNP), then please ask Rachel.

Ask a question Read more from Rachel

Read this next

Rachel Siegel, CFA - profile
Ask an Expert about Gross National Product (GNP)

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms