Difference between GDP and GNP

There is a click all the time whenever we discuss GDP and GNP. They are actually the indicators that assist to find out the economic condition of the nation. GDP is a short name for Gross Domestic Product while GNP is a contraction for Gross National Product. These terms are identical for a common man and that is the reason they are as often as possible compared. However, you look somewhat more profound, you will come into know that both the terms hold distinctive implications. There is likewise a question in regards to which one is a better to show the economic condition of country. The main contrasts in GNP and GDP are discussed in the below article


GDP (Gross Domestic Product) implies the market value of all items, services and products produced in a country during particular period. Gross domestic product is the total demand in an economy of country. To put it plainly, GDP is the aggregate of output of all areas of the economy that includes primary sector, secondary sector and tertiary sector. In Gross Domestic Product, GDP per capita is frequently viewed as indicator of standard of living in country; however it is not a measure of income of any individual. On the other hand, GDP does not include products and services that are produces by the country in different nations. This leads to, GDP measures items just produced locally.


GNP (Gross National Product) referrers to the GDP in addition to any earned income of resident of a nation from abroad venture, minus earned income of abroad residents with the local economy. So, we can say that GNP is the production of the natives of a nation just, wherever they are living. GNP is utilized to gauge how the nationals of a nation are contributing economically. So if an American States resident is living in overseas and he earned some wage there then this wage will include in American’s GNP rather than its GDP.


There are some main contrasts among these terms which are discussed below

  • Stands for:

GDP stands for Gross Domestic Product.

GNP stands for Gross National Product.

  • Meaning:

The value of goods and services produced inside of the geological restrictions of the nation is known as Gross Domestic Product (GDP).

The worth of products and services produced by the nation’s citizens regardless of the geographical restrictions is known as Gross National Product (GNP).

  • Based on:

Gross domestic product discusses the production with respect to location.

Gross national product discusses the production with respect to citizenship.

  • Measures:

Gross domestic product actually measures the strength of local economy of country.

Gross national product measures that how citizens are contributing in nation’s economy.

  • Calculated:

To calculate the GDP following formula is used.

GDP = consumption+ Investment+ government spending + (exports – imports)

To calculate the GNP following formula is used

GNP = GDP + NR (Net Income Receipts) – NP (Net payments)

  • Methods:

Gross domestic product is figured by means of three methods which include Income Method, Output Method, and Expenditure Method.

GNP is figured by means of GDP in addition to net income from abroad


From the above article we come to know about the differences between GDP and GNP.  GDP stands for Gross Domestic Product and it is the value of products that are produced with in a nation while GNP stands for Gross National Product and it is the value of products produced by the citizens of nation. GDP measures the strength of economy while GNP shows the contribution of citizens in economy. Finally there are three techniques used to find out GDP while GNP is calculated with help of GDP.