GDP Deflator

The GDP deflator is a measurement that shows how much the overall price level of goods and services in a country's economy has changed over time. It reflects inflation or deflation within the entire economy. By comparing nominal GDP (current prices) to real GDP (prices adjusted for inflation), the deflator provides insight into whether economic growth is due to increased output or just higher prices. A higher GDP deflator indicates rising prices (inflation), while a lower one suggests falling prices (deflation). It helps policymakers and economists understand the true growth and price changes in the economy.