Glossary Terms

Gross National Product (GNP)

Gross National Product (GNP)
Reviewed by Melissa Cook
Updated March 3, 2023

Gross National Product (GNP) is a measure of the total value of goods and services produced in a given country during a specific period, usually one year. It is used to analyze and compare the economic performance of countries over time.

GNP measures not just domestic production but also income earned by citizens abroad, making it an important indicator of national wealth. 

To calculate GNP, economists sum up all private consumption, investment in businesses and government purchases, net exports (exports minus imports), and other factors such as employee compensation. By adding or subtracting these components from the calculation, economists can gain insight into how different sections of the economy are performing. 

GNP figures provide valuable information for policymakers when making decisions about taxation, government spending and international trade agreements. Additionally, it provides investors with an indication of a country’s overall financial health.

GNP is used by economists to inform economic growth forecasts, benchmark countries in terms of competitiveness, and identify potential investment opportunities. 

Ultimately, it serves as an important indicator for assessing the prosperity of a nation.