"Gross domestic product deflator, referred to as GDP deflator, is an economic indicator used to eliminate the impact of inflation on GDP to more accurately reflect the level of economic development. GDP deflator refers to the When calculating the GDP, the influence of the price increase factor is removed, and the GDP of each year is calculated based on the prices of the base year.
The calculation method of the GDP deflator is relatively complicated. Generally, the price index of each year is divided by the price index of the base year, and then the obtained quotient is multiplied by the GDP of the year. For example, if the price index of a certain year is 1.2, the price index of the base year is 1, and the GDP of the year is 100 billion yuan, then the GDP deflator of the year is 1000×(1÷1.2)=83.33 billion Yuan.
Compared with the nominal GDP, the GDP deflator can better reflect the actual level of economic development. Because nominal GDP includes an inflationary factor, if it is not deflated, it may mislead people to think that the economy has grown, but in fact it is only a numerical increase due to rising prices. The GDP deflator eliminates the impact of inflation and can more accurately reflect the actual growth of the economy.
The GDP deflator is of great significance to economic research and policy making. It can help economists analyze the actual situation of economic growth and provide an accurate basis for policy formulation. At the same time, the GDP deflator is also one of the important indicators of the level of international comparative economic development. In cross-country comparisons, the use of GDP deflators can more objectively reflect the economic levels of different countries and regions, and is helpful for international trade and investment decisions. "