The limitations of GDP:
- The exclusion of non-market transactions.
- The failure to account for or represent the degree of income inequality in society.
- The failure to indicate whether the nation's rate of growth is sustainable or not.
Limitations of Gross National Product (GNP):
- Economic Versus Social Costs:
- Distribution of National Output:
- Income and Output per Capita:
- Upgrading the Quality of Basic Data:
- The Value of Leisure:
- Qualitative Changes in the National Output
Another limitation is that the CPI cannot be used to measure differences in price levels or living costs between one area and another as it measures only time-to-time changes in each area. A higher index for one area does not necessarily mean that prices are higher there than in another area with a lower index.