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How to calculate Real GDP

The Real GDP formula, with plain worked examples you can check yourself.

Real GDP = Nominal GDP ÷ Deflator × 100

Worked examples

Nominal GDP = 5500 · Deflator = 110Real GDP = 5,000
Nominal GDP = 6250 · Deflator = 125Real GDP = 5,000
Nominal GDP = 2500 · Deflator = 125Real GDP = 2,000

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Multiply by 100 to show the answer as a percentage.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Money & Prices.

Related terms

GDPInflationPrice elasticityDeflationMonetary policyMoney supply

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