Gross national income

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Gross national income (GNI) is the total income earned by a country’s residents in a year. It is calculated as GDP plus the income residents receive from abroad minus the income earned by non‑residents in the country. In short, GNI focuses on income, not on where production happens.

What counts as income in GNI? It includes wages, salaries, and other income earned by residents from overseas work, as well as profits, interest, and other property income earned by residents from foreign investments. It does not count money remitted by workers to family members abroad in the form of transfers. GNI is therefore income earned by the country’s people, regardless of where that income is produced.

GNI is different from GDP. GDP measures the value of goods and services produced within a country’s borders, while GNI measures the income earned by the country’s residents, wherever that income comes from. Because of this, GDP and GNI can move apart if residents earn a lot of income abroad or if foreigners earn income inside the country.

A long-running change in international statistics is that what was once called gross national product (GNP) is now generally referred to as GNI. The switch happened as statistical methods evolved, with the concept kept under the same overall idea but framed as income received by residents rather than production owned by residents. Some data still use the older GNP wording for particular types of expenditure data, but GNI is the standard term today.

GNI and related concepts are used in practice in several ways. For example, GNI is used to calculate a large portion of contributions to the budgets of international organizations, including parts of the European Union budget. The concept can also be adjusted for currency exchange-rate fluctuations using the Atlas method, making it easier to compare GNI across countries with different currencies.

A well-known real‑world illustration of how GNI can differ from GDP is Ireland’s experience with multinational tax planning. In recent years, Ireland’s GDP was heavily distorted by base‑erosion and profit‑shifting practices, so a modified GNI measure (GNI*) was introduced to provide a clearer picture of the economy. This shows that GNI can diverge from GDP and why economists and policymakers pay attention to both figures.

Net national income (NNI) is another related idea: it equals GNI minus depreciation, reflecting the economy’s net income after accounting for the wear and tear on capital. GNI also interacts with other measures like gross national disposable income, which adds in current transfers from abroad.

In short, GNI tells you how much income the people of a country actually receive, taking into account income earned abroad and income paid to foreigners, while GDP tells you how much is produced inside the country’s borders. Both measures are useful for understanding the size and health of an economy, and both can tell different stories about a country’s economic activity.