Entails a large amount of data-collection and calculation because it involves the measurement of the total product and services over a large region.

The existence of a large number of non-monetized activities in these countries, especially in the agriculture sector, makes computation of the national income more challenging

The outputs are either consumed directly by farmers or exchanged for other goods and services which tends to make it more difficult to measure the national income

Transactions contributing to production such as illegal trade and tax-avoiding activities, are not reported, thus causing the GDP to be underestimated

Avoid paying higher taxes may cause a loss in government income revenues and sales

A number of productive work is carried out in the economy which do not involve payment

During these transactions, no money changes hands and subsequently no payments are recorded

For example, food grown in backyard plots, home repairs, clothes sewn at home , and any other instances of do-it-yourself goods and services that people make or perform for themselves, their families or friends are not calculated in the GDP

The lack of professionals, such as statisticians, researchers, programmers and analysts, is a major problem in third world countries.

The services of these professionals are very important in estimating the national income data accurately with minimum errors

Data collected on national income, regardless of the method used, has to be analyzed using sophisticated machinery

Double counting in national income will appear when both values of final goods and intermediate goods are included

To avoid this problem, the GDP includes only the value of final goods and ignores intermediate goods together

Inclusion of the value of intermediate goods will amount to multiple counting which will distort the value of the GDP