Definition

GNI is defined as GDP plus net receipts from abroad of wages and salaries and property income.

Wages and salaries from abroad are those that are earned by residents, i.e. by persons who essentially live and consume inside the economic territory of a country but work abroad (this happens in border areas on a regular basis) or by persons that live and work abroad for only short periods (seasonal workers). Guest-workers and other migrant workers who live abroad for one year or more are considered to be resident in the country where they are working. Such persons may send part of their earnings to relatives at home; these remittances, however, are treated as transfers between resident and non-resident households rather than net receipts from abroad of wages and salaries.

Property income from abroad includes interest, dividends and all or part of the retained earnings of foreign enterprises owned fully or in part by residents. In most countries, net receipts of property income account for most of the difference between GDP and GNI. Note that retained earnings of foreign enterprises owned by residents may not actually return to the residents concerned as, in some countries, there are restrictions on the repatriation of profits. Receipt of retained earnings is an imputation; since there is no actual transaction, an outflow of the same amount is recorded as a financial transaction (a reinvestment of earnings abroad). Countries with large stocks of outward foreign direct investment may be shown as having large receipts of property income from abroad and therefore high GNI even though much of the property income may never return to the country, but instead add to the foreign direct investment.

Depreciation, which is deducted from GNI to obtain NNI, is the decline in the market value of fixed capital assets - dwellings, buildings, machinery, transport equipment such as physical infrastructure, software, etc. - through wear and tear and obsolescence.

For more statistics on economic, environmental and social issues visit online the OECD Factbook 2010.