Enter the nominal GDP and either the inflation/deflation rate (Rate tab) or the GDP deflator index (Index tab) into the real GDP calculator. The calculator will return the real gross domestic product (real GDP).
Real GDP Formula
The following formula is used to calculate real gross domestic product using the GDP deflator (an index with a base year typically set to 100).
RGDP = \dfrac{NGDP}{GDPD/100} = \dfrac{NGDP \times 100}{GDPD}- Where RGDP is real gross domestic product (real GDP)
- NGDP is nominal gross domestic product (nominal GDP)
- GDPD is the GDP deflator index (base year = 100)
To calculate real GDP using the GDP deflator, divide nominal GDP by (GDP deflator / 100) (equivalently, multiply nominal GDP by 100 and divide by the GDP deflator).
Real GDP Definition
Real GDP (real gross domestic product) is a measure of a country’s economic output that has been adjusted for changes in domestic price levels, allowing output to be compared across time in constant (inflation-adjusted) terms.
How to calculate real GDP?
How to calculate real GDP
- First, determine the nominal GDP
Using an online database that tracks gross domestic product, determine the nominal GDP for the country being analyzed.
- Next, determine the GDP deflator
Find the GDP deflator (a price index, often with a base year of 100) for the same country and time period.
- Calculate the real GDP
Enter the information from steps 1 and 2 into the formula or calculator above.
FAQ
Real GDP is gross domestic product adjusted for changes in domestic price levels (inflation/deflation), typically using a price index such as the GDP deflator, so output can be compared over time in constant dollars.
Deflation is a general decrease in the prices of goods and services over time (negative inflation), which increases the purchasing power of money.
