Gross national income
The Gross national income (GNI) consists of: the personal consumption expenditure, the gross private investment, the government consumption expenditures, the net income from assets abroad (net income receipts), and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the indirect business taxes.
The GNI is similar to the gross national product (GNP), except that in measuring the GNP one does not deduct the indirect business taxes.
GNI versus GDP
For example, the profits of a US-owned company operating in the UK will only count towards US GNI and UK GDP. If a country becomes heavily indebted, and pays large amounts of interest to service this debt, this will be reflected in a decreased GNI but not a decreased GDP. If a country sells off its resources to entities outside their country this will also be reflected over time in decreased GNI, but not decreased GDP. Therefore, the GDP appears more attractive for countries with increasing national debt and decreasing assets.
GNP is a concept that goes hand in hand with GNI, GDP, and NNI. In contrast to the GNI, the GNP does not account for the balance of cross-country income, such as interest and dividends. In contrast to the GDP, the GNP account for the values of products and services based on citizenship of the owners rather than the territory of the activity
How to Calculate the GNI
As GNI is an add up of Net Income from abroad and the GDP, one can calculate the GNI by the following formula.
Where FL and DL are respectively the foreign and domestic income from labor, and NCI the net capital inflow. For example, if a country A's nominal GDP is $20,000, the domestic income from labor $3,000 and the foreign income from labor $5,000, and the country received a $10,000 donation from another country's charity organization, the GNI of country A would be $32,000.
|1||United States||15,734,567||United States||14,600,828||United States||14,223,686||United States||14,506,142|
|6||United Kingdom||2,418,464||United Kingdom||2,399,292||United Kingdom||2,538,578||France||2,700,770|
- Net national income
- Measures of national income and output
- Gross national income in the European Union
- List of countries by GNI per capita
- National average salary
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