What is the Gross National Savings?

When we talk about Gross National Savings (ANB) it refers to the total savings that exist in a country. Said savings can be invested in himself or in the rest of the world, and they exist: both public savings and private savings. The former refer to the savings of public administrations or the State, while the private to that of families or companies of a certain country.

How to calculate the Gross National Savings?

The ANB calculation is calculated for a specific period of time, which is normally one year. Furthermore, it is a flow variable, so we emphasize that it is calculated using a period and is valid for that period.

It is important to mention that gross national saving presents the following formula:

Gross national saving (ANB) = GNP - C

Being: GNP, gross national product; and C, best before date.

On the other hand, to calculate the GNP:

PNB = C + I + G + (X-M)

Being: C, public and private consumption; I, public and private investment; G, public and private spending; XM, exports - imports or balance of the Balance of trade

Using these formulas can be very interesting, since they allow you to calculate the gross savings on the GDP. This ratio measures gross national income minus public and private consumption plus net transfers achieved in a country. In this way, we will obtain data on the ratio of gross savings to GDP.

The concept of gross national savings allows us to see the total balance that economic agents (public and private) allocate to savings. In addition, it tells us how the economy is working (it allows us to see the average saving per person, and compare it with other countries), the degree of awareness of future contingencies (depending on the saving per person), as well as knowing the amount of money that can be spent on building a Welfare state.

Leave a Comment