Net Material Product was the main macroeconomic indicator used for monitoring growth

Economic growth

In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...

 in national accounts

National accounts

National accounts or national account systems are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry accounting...

 of socialist countries during the Soviet era. These countries included the USSR and all the Comecon

Comecon

The Council for Mutual Economic Assistance , 1949–1991, was an economic organisation under hegemony of Soviet Union comprising the countries of the Eastern Bloc along with a number of communist states elsewhere in the world...

 members. NMP is the conceptual equivalent of Gross Domestic Product

Gross domestic product

Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

 (GDP) in the United Nations System of National Accounts

United Nations System of National Accounts

The United Nations System of National Accounts is an international standard system of national accounts, the first international standard being published in 1953...

, 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 (but not passenger transport), communication and information services supporting material production, and other material production activities. It is calculated by subtracting the value of all production costs (including the cost of material inputs, depreciation, and labor in production) 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 (which is not subtracted in GDP calculations) and the total value of all services classified as “non-productive” in the socialist system of national accounts (which are part GDP). These “non-productive” services include health care, education, housing, public utilities, consumer services, communication in the non-productive sector, passenger transport, financial services (banking, credit, insurance), 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

Russian language

Russian is a Slavic language used primarily in Russia, Belarus, Uzbekistan, Kazakhstan, Tajikistan and Kyrgyzstan. It is an unofficial but widely spoken language in Ukraine, Moldova, Latvia, Turkmenistan and Estonia and, to a lesser extent, the other countries that were once constituent republics...

 is Национальный доход (literally: national income). Unfortunately, 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

United Nations System of National Accounts

The United Nations System of National Accounts is an international standard system of national accounts, the first international standard being published in 1953...

. The table compares the new GDP estimates with the traditional NMP numbers (in billions of current rubles). 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.

Indicator	1980	1985	1990
GDP	619	777	1000
NMP	462.2	578.5	700.6
NMP in % of GDP	75	74	70

Source: Narodnoye khoziaystvo SSSR 1990, statistical yearbook of the USSR, p. 5.

NMP growth for Comecon countries

Change in NMP (in constant prices) 1980-1990 (in percent of 1980)

Indicator	Bulgaria Bulgaria Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...	Cuba Cuba The Republic of Cuba is an island nation in the Caribbean. The nation of Cuba consists of the main island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city...	Czecho- Slovakia Czechoslovakia Czechoslovakia or Czecho-Slovakia was a sovereign state in Central Europe which existed from October 1918, when it declared its independence from the Austro-Hungarian Empire, until 1992...	East Germany	Hungary Hungary Hungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...	Mongolia Mongolia Mongolia is a landlocked country in East and Central Asia. It is bordered by Russia to the north and China to the south, east and west. Although Mongolia does not share a border with Kazakhstan, its western-most point is only from Kazakhstan's eastern tip. Ulan Bator, the capital and largest...	Poland Poland Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...	Romania Romania Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...	Vietnam Vietnam Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...	USSR
NMP in 1990 (1980=100)	141	143	117	139	112	156	108	144	153	127

Source: Statistical Yearbook of Comecon Countries 1989, Table 21, p. 59.

See also

• Material Product System
  Material Product System
  Material Product System refers to the system of national accounts used in the former Soviet Union and the Eastern Bloc countries, as well as in China until 1993 introduced the Western SNA system and GDP to China,...
  
  
• Material product
  Material product
  Material product is a category in Marxian economics and Soviet social accounting referring to the produced output of tangible material goods, including energy supplies and goods-transport. It contrasts with services and activities such as administration that do not themselves result in any tangible...
  
  
• Value product
  Value product
  The value product is an economic concept formulated by Karl Marx in his critique of political economy during the 1860s, and used in Marxian social accounting theory for capitalist economies...
  
  
• Productive and unproductive labour
  Productive and unproductive labour
  Productive and unproductive labour were concepts used in classical political economy mainly in the 18th and 19th century, which survive today to some extent in modern management discussions, economic sociology and Marxist or Marxian economic analysis...