The Key Difference Between GDP and GNP

GDP vs GNP
Feature	GDP (Gross Domestic Product)	GNP (Gross National Product)
Definition	Total monetary value of all goods and services produced within a country’s borders in a given time.	Total monetary value of all goods and services produced by a country’s residents, regardless of location.
Geographical Scope	Includes production within the country only.	Includes income earned by nationals both domestically and abroad.
Foreign Income	Excludes income earned by residents from abroad.	Includes income earned by residents from foreign investments or jobs.
Foreign Companies	Includes output by foreign companies operating inside the country.	Excludes foreign company output in the country; includes citizens’ foreign income.
Use in Policy	Widely used to assess domestic economic activity and growth.	Used to understand income generated by a nation’s citizens globally.
Indicator of	Domestic economic strength and productivity.	Overall income level of a country’s nationals.
Formula	GDP = Consumption + Investment + Government Spending + (Exports − Imports)	GNP = GDP + Net income from abroad (Factor income from abroad − Payments to foreigners)
Example Scenario	Includes output of a U.S. car plant in India in India's GDP.	Includes income of U.S. citizens working abroad in U.S. GNP.
Data Representation	Reflects economic activity in the country’s territory.	Reflects economic contribution of the nation’s people.
When They Differ	Significant foreign investment inside a country may increase GDP but not GNP.	High remittances and foreign income may raise GNP over GDP.