Net material product


Net Material Product was the main macroeconomic indicator used for monitoring growth in national accounts of socialist countries during the Soviet era. These countries included the USSR and all the Comecon members. NMP is the conceptual equivalent of Gross Domestic Product in the United Nations System of National Accounts, although numerically the two measures are calculated differently.
NMP is calculated for the material production sectors only, and excludes most of the service sectors, which are part of GDP. The material production sectors include manufacturing industries, agriculture and forestry, construction, wholesale and retail trade, supply of material inputs, road maintenance, freight transport, communication and information services supporting material production, and other material production activities. It is calculated by subtracting the value of all production costs from the value of output produced in the material production sectors.
For comparison with GDP, it is necessary to add back to NMP the value of fixed asset depreciation and the total value of all services classified as "non-productive" in the socialist system of national accounts. These "non-productive" services include health care, education, housing, public utilities, consumer services, communication in the non-productive sector, passenger transport, financial services, government services, the defense establishment, and social organizations. The tax components subtracted in the calculation of GDP should also be added back to obtain NMP.
The economic term that corresponds to Net Material Product in Russian is Национальный доход. None of the accepted meanings of national income in English matches the meaning in Russian, and Net Material Product was introduced into English usage as the best alternative.

GDP and NMP for USSR 1980–1990

GDP began to be calculated in the USSR in 1988, based essentially on the United Nations System of National Accounts. The table compares the new GDP estimates with the traditional NMP numbers. GDP is seen to be 25%–30% higher than NMP due to depreciation and the "non-productive" service sectors included in GDP but not in NMP.
Indicator198019851990
GDP6197771000
NMP462.2578.5700.6
NMP in % of GDP757470

NMP growth for Comecon countries

Change in NMP 1980–1990
IndicatorBulgariaCubaCzecho-
Slovakia		East
Germany		HungaryMongoliaPolandRomaniaVietnamUSSR
NMP in 1990
141143117139112156108144153127