Can GNP become higher than GDP, and why?

In this article, you will learn all you must know about GDP and GNP, their relation with a country’s economy, and their link with the remittance industry. Also, it will shed light on the factors that contribute to the development of a country’s economy. Let’s start.

The gap between a developing and a developed country is due to necessities such as better healthcare, quality education, multiple work opportunities, and a suitable environment to grow financially, etc., that are available in the latter type of countries. Therefore, the people of developing countries such as Bangladesh try to go to the developed countries to seek the benefits listed above. There, they find opportunities to work and then look for ways for online money transfer to Bangladesh or any other country. Most of these expatriates often end up sending their remittances through one of the world’s best online money transfer companies like ACE Money Transfer.

Let’s now study GDP and GNP in detail.

Gross Domestic Product (GDP):- It is the value of all the finished goods made within a country’s borders. GDP is territory-specific.

Gross National Product (GNP):- It is the value of final goods made by local companies located in foreign lands. GNP also includes foreign investment in a country.

Now, let’s take a quick look at the contribution of GDP and GNP in a country’s economic development.

The following few factors indicate the positive impacts of GDP on an economy.

Expanding local industry:-

A strong GDP indicates that the regional sector inside a country is increasing rapidly. Or, it can be put the opposite way in which an expanding local industry will ensure that the country’s GDP is strong. A government is supposed to ensure the well-being of its people by providing work opportunities. And in developing countries, given the low literacy rates mainly, blue-collar jobs are available in the industry regardless of their type.

Do you know that when a Bangladeshi overseas worker make a money transfer to Bangladesh, it significantly helps to expand various industries in the country? Foreign remittances help uplift the living standards of people and enable them to make savings as well as invest in different businesses.

Potentials of a country:-

Any country essentially has many potentials that need to be explored. For example, one country will have oil reservoirs, which is the case with many Arab countries, while others may have reservoirs of natural gas, which is, of course, the case of Pakistan. Yet others may have the climate conducive to growing crops etc.

Governments must explore these potentials and build industries around these, which will eventually lead to work opportunities for the local population.

When people don’t find opportunities in their native land, they tend to migrate to some developed country where they can benefit from all the opportunities available. Bangladeshi expatriates are a big example of migrant workers living and earning in foreign lands. These overseas workers send money to Bangladesh which they earn by working in various fields and industries in developed countries.

A suitable work environment:-

Another important factor is that the governments have to ensure the availability for the local industries to grow, such as a lax taxation mechanism, smooth customs mechanism and simple policies for imports and exports, etc. Without the availability of these, the GDP will not positively impact the country’s economy.

Now, let’s see the importance of GNP in a country’s economic uplift.

The following factors determine the role of a country’s GNP in its economic prosperity.

  1. Stable political environment:-
    Since GNP involves foreign investment in a country’s industry, a country needs to have a politically stable environment to attract foreign investment.
  2. Stable law and order:-
    Another connecting factor is the stability of law and order. A foreign investor will not want to invest in a country with deteriorating law and order situation.
  3. Better industry abroad:-
    In GNP, local people go to foreign lands and invest in sectors that correspond to their skills and expertise in a particular industry. The better conditions of some industries in other countries pull local people, contributing to their country’s economy.

If you take a closer look at these factors, you will realise that all of these factors are missing most of the time in almost every country in the third world. Therefore, both the GDP and GNP remain low in most countries.

You will now briefly study if GNP can be higher than the GDP.

A country’s GNP can become higher than its GDP if the income through GDP is smaller than the GNP. And again, the primary reasons remain the same as stated above. But, a particular reason for a higher GNP is the difference between the values of currencies.

Let’s see how!

The difference:-

In GNP, foreign investments are involved, of course, higher than the local currencies. A developed country has the necessary infrastructure to invest in a specific country, examples explained above. And these investments, when converted into the local currency, become a considerable amount which pushes the GNP ahead of GDP at times.

Now, let’s see the link between GDP and the remittance industry.

The link:-

Gone were the days when governments alone had the privilege to sell domestically created products to the outside world. Technology has made it easier now for individual businesses to do the same with, of course, government regulations. And this necessitates the need for the remittance industry to jump in.

Not only is it confined to the sale and purchase of the goods, but it also includes services. In the wake of the COVID-19 pandemic, many people worldwide sought online works and jobs. Both the employer and the one purchasing goods sent individually prefer to avail of the services of some credible online money transfer companies for swift and secure transfer of funds.

In doing so, the urgent requirement is to choose a credible company such as ACE Money Transfer that offers swift, secure, and convenient transfer of funds from one place to another. Several Bangladeshi expatriates working abroad choose ACE to send money to Bangladesh online and support their families.


Essential information about the GDP and GNP of a country, including the factors that increase a GNP more than a country’s GDP have been explained above. The catch is to ensure that you look for your satisfaction while you try to move your funds either as a small part of your country’s GDP or GNP or even as a small and individual investor.