Gross national income

GNI is one of the most popular measurements of how well the country did. It allows us to calculate the sum of the income which was obtained in a particular year. We take into account the production of the final goods (the consumer and productive goods). They add to the "nation’s wealth” of the given country. Interestingly, the GNI is equal to the net national product.

It is important to notice that the GNI evolved from the GNP, which was an abbreviation from Gross National Product. It basically was the same. However, in order to depict the values more realistically, the calculation process was slightly altered.

How does GNI compare to GDP?

These two indicators are incredibly similar. There are very insignificant differences between values presented by the GNI and the GDP. However, they are visible, especially if we wish to compare the amount of money that is flowing from foreign countries and the number of cash that is flowing to them.

That is why most often GNI is used to depict the number of foreign aid and a capital inflow one could notice. This is of utmost importance for the developing countries, where such aids are quite crucial and can introduce much higher differences between the GDP and the GNI.

What are the numeric differences between these two measurements?

As it was already stated, the rankings will remain almost the same for the top 20 of countries around the world. The numeric values change slightly. However, it is important to notice that there is a swift between number 7 and number 8 on the list.

In the GNI rankings, it is France who gets to be ahead of Indonesia. The exact GNI value of the French is $3,383,838.80, whereas Indonesia's value is 3,238,279.46. However, the GDP indicates that France loses to Indonesia by a margin, which is only $23 million.

In terms of percentages, it is said that the US GNI is 1.5% higher than the GDP. As you can see, it is an extremely low number that practically does not influence the rankings. However, if we were to compare the GNI and GDP of Armenia, then we notice that the GNI of Armenia is 4.5% higher than its GDP. It shows how important the GNI values are if we are to present the data regarding the developing countries.

Obviously, as in the case of GDP, we should also remember about PPP, which is a purchasing power parity. It is a measurement that allows us to compare different countries based on the same purchasing power. This idea compares the products from different parts of the world based on the exchange ratios of large baskets of goods. It is of utmost importance in some of the cases just to depict the real comparison between the world’s greatest powers.