NATIONAL INCOME

The usual measure for a country's annual national income is Gross Domestic Product or GDP. But it's not the only one. Gross National Income takes GDP and adjusts it for payments to foreign workers, and income from investments abroad. So if Danish company gets paid a dividend from its foreign subsidiary, this increases GNI, but not GDP.

Since it is in principle good that Danish subsidiaries can send profits back to the motherland, it is good if a country's GNI is higher than its GDP. In that regard, Denmark is sitting pretty. In absolute terms, its GNI is nearly 4%, or Kr.25 billion, higher than its GDP. During the past 10 years, GDP has grown by an average of 0.6% a year; yet GNI had grown by an average of 1.5% a year. Most of this difference is due to pension funds' and companies' investing abroad, and thereby generating foreign income.

The difference between the two measures of income is not always positive. It is in France, Germany and Holland (just); but it is not in Italy, Austria or Portugal. Most surprisingly, it is not positive in the U.K., traditionally seen as a major investor abroad. That is a fact that the current British Government is unlikely to highlight.

Walter Blotscher