Do you know that nearly 281 million people live in foreign lands? Foreign remittances reaching almost $702 billion according to 2020 statistics have proved to be an essential factor to grow GNP more than GDP in several countries. India has the most diasporas around 18 million, is one of the top 10 countries with the highest GNP. These Indian diasporas work abroad and send money to India that continually adds to its gross national income every year.
Before you study the difference between GDP and GNP to know about the top countries with the most GNP, let’s first glance over the reasons that push people to migrate to other countries.
Reasons to Move Abroad
There are many reasons people feel the need to go out of their countries, such as breaking the cycle of poverty, quality education, and better living conditions. It applies to third-world countries where these necessities are no less than a luxury. And in the third world, India is one of the countries that have seen poverty and hardships of life to a greater extent.
The expatriates from India go to foreign countries to find jobs and then send money to their families in through the world’s top online remittance service providers, one of which is a trusted name, ACE Money Transfer. They ensure a financially secure future for their families, including themselves through the remittances they earn and send back home.
Let’s now try and understand both GDP and GNP separately.
GDP or Gross Domestic Product:-
GDP is the total market value of all the finished goods and services produced inside a country within a specific time. Typically, it is calculated annually, but, at times, it is calculated quarterly to check an economy’s health.
GNP or Gross National Product:-
GNP is the value of the output of finished goods and services by the nationals of a country regardless of where they contribute from. It also involves foreign investment, either through remittances or directly as investments.
India has received almost $87 billion remittances in 2021 that have stimulated its GNP growth significantly. Each money transfer to India that its diasporas make from abroad keep adding to the country’s GNP progress.
In short, both the GDP and GNP are indicators of a country’s economic growth and health. Therefore, you need to see the factors that impact both the GDP and GNP of a country.
Every country is blessed with natural resources like water, forests, landscape, oil, gas, minerals, etc. But, only having these resources is never enough without their effective utilisation through necessary infrastructure.
A country’s national infrastructure is also called its capital which includes rail and road networks, machinery, means of transportation and communication, etc. Its effective creation is called capital formation. Through this, a country’s workforce can ensure higher input.
A country with better managed, educated, and appropriately skilled human resources can help its economy with increased productivity both at home and abroad.
In today’s world, technological advancement is one of the most critical factors for economic growth. And if a government fails to invest in it properly, its economic prosperity will remain doubtful.
Political and social stability:-
A country’s social viability and political stability are the key determinants of its economic growth and expansion. Other factors include a strong currency, education, legal framework, foreign trade, and demand and supply. And a closer look at all these factors will reveal that all these factors are visible in all the strong economies worldwide. Although, India lacks a majority of these factors; however, all the Indian expatriates who send money to India online every year don’t let its GNP fall down.
Here’s the list of the top 10 countries having the most GNP which indicates that these countries have a huge number of expatriates.
1- United States of America – $20.64 trillion
2- China – $13.18 trillion
3- Japan – $5.23 trillion
4- Germany – $3.91 trillion
5- United Kingdom – $2.77 trillion
6- France – $2.75 trillion
7- India – $2.73 trillion
8- Italy – $2.04 trillion
9- Brazil – $1.90 trillion
10- Canada – $1.67 trillion
Are you still confused about what connection remittances have with GNP? Don’t worry! Here you can understand the link between a country’s GNP and the remittances.
How Remittances are Linked with GNP?
As a country’s GNP includes the input of all the nationals of a country living abroad, their primary channel of sending their incomes back home is the remittances. As the value of remittances increases, GNP growth gets stronger with it. Therefore, remittances directly impact a country’s GNP towards growth and can enhance the living standards of the beneficiaries’ families. For instance, if an Indian diaspora makes an online money transfer to India, they support their family’s needs, improve their quality of life, and at the same time add substantial value to India’s GDP.
What is the Best Way to Send Money to India?
The best option is to find an internationally acclaimed remittance services provider such as ACE Money Transfer for the top-notch services it offers that include safety, speed, convenience, low fee, best exchange rates, etc. Several Indian expats consider ACE the best way to send money to India online based on its service features, security, and frequent promotions and rewards.