Gross National ProductPresentation of

Macro EconomicsPresented by : Seetal Daas

Business Administration Part II(Batch 2k13)Sindh University Laar Campus @ Badin

The money of all the final goods and services produced by the people living in a country during a period of one year.

The value of all goods and services produced by nationals whether in the country or not.

Definitions of GNP

Personal Consumption Expenditure Gross Domestic Private Investment Govt. Expenditure on Goods & Services Gross Domestic Public Investment Export Surplus Net Foreign Investment

following expenditures are added together to measure GNP

GNP=C+I g+ G+(X-M)C=Personal Consumption ExpenditureI g=Gross Investment (Public & Private)G=Govt. on goods and servicesX-M=Export Surplus

GDP=C+G+I+(XN)C= is equal to all private consumption, or consumer spending, ina nation's economyG= is the sum of government spendingI= is the sum of all the country's businesses spending on capitalNX= is the nation's total net exports, calculated as total exportsminus total imports. (NX = Exports - Imports)

GNP & GDP can be expressed symbolically as;

GNP is defined as ‘The value of all goods and services produced by nationals whether in the country or not’.

GDP is defined as ‘The monetary value of all the finished goods and services produced within a country's borders in a specific time period’.

Difference b/w GDP & GNP(according to definitions )

If a Japanese multinational produces cars in the UK. This production will be counted towards UK GDP. However, if the Japanese firm sends £50m in profits back to shareholders in Japan. Then this outflow of profit is subtracted from GNP. UK nationals don’t benefit from this profit.

If a UK firms makes profit from insurance companies located abroad, then if this profit is sent back to UK nationals, then this net income from oversees assets will be added to GNP.

Note if a Japanese firm invests in the UK, it will still lead to higher GNP, as some national workers will see higher wages. However, the increase in GNP will not be as great as GDP.

Examples of Increment and decrement of GNP & GDP

Economy Of Pakistan(2012) Rank26th (PPP)

44th (Nominal)Currency1 Pakistani Rupee (PKR) Rs.1 = 100 PaisasFiscal year1 July – 30 June Trade Organizations ECO, SAFTA, ASEAN, WIPO and WTO GDP$240 billion (nominal) (2012)

$514.6 billion (2012 est.)(PPP)GDP growth3.7% (2012)5.1% (1st Quarter 2013/2014 FY)GDP per capita$1,278 (nominal; 2012) 

$3,376 (PPP; 2012)GDP by sector agriculture: 21.2%, industry: 25.4%, services: 53.4% (2010 est.)

Inflation (CPI)10.9% (Dec 2013) Population: below poverty line24% (2013),Labor force60.36 million (2012 est.)Labor

forceby occupation agriculture: 43%, industry: 20.3%,services: 36.6% (2005 est.)Unemployment5.6% (2012 est.)

Main industries textiles and apparel, food processing, pharmaceuticals, construction materials, chemicals, cement, mining,machinery, steel, engineering, software and hardware, motorcycle and auto parts, electronics, paper products,fertiliser, shrimp Ease of doing business rank107th (2013)

ExternalExports$29.66 billion (2012 est.)Export goods textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sports goods, chemicals, manufactures, carpets, steel, foodstuffs, fertilizer, Cement, sugar, animals, electrical equipment, petroleum and rugs Main.

Continued…•Export partners United States 13.3% China 10.9%,United Arab Emirates 8.6% Afghanistan 8.5% (2012 est.)Imports$33 billion (2013 est.)• Import goods petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea•Main import partners China 19.8%,Saudi Arabia 12.0%,United Arab Emirates 11.9% Kuwait 6.2% (2012 est.)]Public finances Public debt62% of GDP (2013est.),

•Revenues$29.51 billion (2012 est.)•Expenses$44.19 billion (2012 est.)Credit rating Standard & Poor's:B- (Domestic)B- (Foreign)B- (T&C Assessment)Outlook: Stable[