Real GDP Calculator
Calculate inflation-adjusted GDP for accurate economic analysis
Real GDP Calculation
Core Economic Data
GDP at current market prices (not adjusted for inflation)
Price index with base year = 100 (e.g., 110 means 10% inflation)
Prices have increased (inflation)
Real GDP Results
Formula Used
Economic Impact Analysis
Example: Economic Growth Analysis
Scenario
Country: Hypothetical Economy
Current Year Nominal GDP: $15,000 billion
GDP Deflator: 115 (15% inflation since base year)
Previous Year Real GDP: $12,500 billion
Calculation
Real GDP = $15,000B ÷ (115 ÷ 100) = $13,043B
Growth Rate = ($13,043B - $12,500B) ÷ $12,500B × 100 = 4.3%
Inflation Impact = 15% price increase reduced apparent growth
Result: Strong real economic growth despite high inflation
GDP Growth Rates
< -2%
Recession (significant contraction)
-2% to 0%
Economic slowdown
0% to 3%
Moderate growth
> 3%
Strong expansion
Understanding Real GDP
Adjusts for inflation to show true economic growth
Enables comparison across different time periods
Better indicator of living standards than nominal GDP
Used for economic policy decisions
Reflects actual productive capacity changes
Understanding Real GDP
What is Real GDP?
Real GDP is the inflation-adjusted measure of economic output that reflects the true growth in an economy's productive capacity. Unlike nominal GDP, real GDP removes the effects of price changes to show actual increases in goods and services produced.
Why is Real GDP Important?
- •Provides accurate measure of economic growth
- •Enables comparison across different time periods
- •Helps identify true economic trends vs. price effects
- •Essential for monetary and fiscal policy decisions
Real GDP vs Nominal GDP
Nominal GDP
Current market prices
Includes both quantity and price changes
Real GDP
Constant base year prices
Shows only quantity changes (true growth)