GDP and GNP

National Accounting is the method used by governments to determine the overall wealth of the nation. National Income (Net National Product) combines income from the factors of production of labour, land and capital/ entrepreneurship (profits). It excludes allowances for using up capital (depreciation), but adds income from abroad. It approximates the total value of the goods and services produced in the economy over the year.

Gross Domestic Product (GDP) is the value of Island output (wages plus profits and other local income) and is close to the value of total expenditure taking place within the Island. GDP can be viewed as the total of consumer and States spending plus business investment.

Net income received by residents from abroad is added to GDP to make Gross National Product. GNP is taken as being synonymous with National Income, though theoretically depreciation allowances should be added to GNP to give National Income.

For further information and figures on National Income, please see the Facts and Figures Booklet.