How to Calculate the GDP Deflator

The GDP deflator equals nominal GDP divided by real GDP, times 100 — it measures the price level of all goods in GDP.

Formula

GDP deflator = (Nominal GDP ÷ Real GDP) × 100

Steps

1
Find nominal GDP. Output valued at current-year prices.
2
Find real GDP. Output valued at base-year prices.
3
Divide and rescale. GDP deflator = (Nominal GDP ÷ Real GDP) × 100.

Worked example

If nominal GDP is $21T and real GDP is $18T, the GDP deflator = (21 ÷ 18) × 100 = 116.7, meaning prices rose about 16.7% since the base year.

Frequently asked questions

How is the GDP deflator different from CPI?

The GDP deflator covers all domestically produced goods and services and changes its basket each year; CPI tracks a fixed basket of consumer goods. They usually move together but not identically.

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