Vietnam: What do GNI and GNP mean? How to calculate GNI and GNP

Hello, Lawnet would like to answer as follows:

1. What do GNI and GNP mean?

GNI and GNP are defined as follows:

GNI stands for Gross National Income. It reflects the total income generated by the residents of a country, including income from both domestic and foreign sources, during a specific period, usually a year.

GNP stands for Gross National Product. It is an economic indicator that measures the total value of all goods and services produced by the residents and businesses of a country, regardless of where they are produced. This includes both products and services produced by the citizens of a country within and outside its territory.

2. How to calculate GNI and GNP

Calculation of GNI:

GNI is a balanced indicator of first-time income distribution. To calculate this indicator, production accounts and income generation accounts need to be prepared, which may be based on GDP and related indicators.

The method of calculating GNI is regulated in Appendix I issued with Decree 94/2022/ND-CP, as follows:

(1) At current prices

GNI at current prices = GDP + Difference between income of Vietnamese workers abroad remitted to Vietnam and income of foreigners in Vietnam remitted abroad + Difference between income received from abroad and income paid abroad in ownership

Where:

- The net difference between income and payments of labor income with foreign countries is the remaining part between income from wages and salaries (in cash or in kind) and other income categorized as labor remuneration received by Vietnamese workers residing abroad from organizations and non-resident production units (foreign) minus labor remuneration paid by organizations and resident production units of Vietnam to foreign workers residing in Vietnam.

- The difference between income received from abroad and income paid abroad in ownership is the remaining part of ownership income received by Vietnamese units and residents from abroad (from non-resident units and residents) minus the ownership income of non-resident units and residents of Vietnam.

- Income or payment of ownership, includes the following:

+ Income or payment of direct investment profits with foreign countries;

+ Income or payment of profits from investment in securities such as shares, stocks, bonds, and other valuable papers and financial instruments;

+ Income or payment of rental, lease, usage rights, copyrights, trademarks, mineral exploitation rights for production purposes, land lease, airspace, seas, borders, etc.

(2) At comparative prices

GNI at comparative prices = Gross National Income (GNI) at current prices of the reporting year / GDP deflator index of the reporting year compared to the base year

Calculation of GNP

There are two formulas to calculate GNP, as follows:

Formula 1: GNP = (X-M) + NR + C + I + G

- Where:

+ X is the net export volume of the country;

+ Y is the net import volume of the country;

+ NR is the net income of foreign assets;

+ C is the individual consumption expenditure;

+ I is the domestic private investment;

+ G is the government expenditure;

Formula 2: GNP = GDP + PI(R) - PI(P) = GDP + NPI

- Where:

+ GDP is the average business production result per capita;

+ PI(R) is the income from assets created by domestic factors abroad;

+ PI(P) is the income from assets created by foreign factors within the country;

+ NPI is the net income from foreign assets;

Best regards!

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