GNP may be much less than GDP if much of the income from a country's production flows to foreign persons or firms. For example, in 1994 Chile's GDP was 5 percent smaller than its GDP. If a country's citizens or firms hold large amounts Of The stocks and bonds of other countries’ firms or governments, and receive income from them, GNP may be greater than GDP. In Saudi Arabia, for instance, GNP exceeded GDP by 7 percent in 1994. For most countries, however, these statistical indicators differ insignificantly.
GDP and GNP can serve as indicators of the scale of a country’s economy. But to judge a country’s level of economic development, these indicators have to be divided by the country’s population. GDP per capita and GNP per capita show the approximate amount of goods and services that each person in a coun – try would be able to buy in a year if incomes were divided equally (Figure 2.1). That is why these measures are also often called ‘’ per capita incomes. “