Mastodawn

acemaxx Jul 18, 2023

#China - GDP #deflator is calculated by dividing #nom GDP by #real GDP (which is the GDP adjusted for inflation) and then multiplying the result by 100. It serves as an indicator of #inflation or #deflation within an economy, chart @BloombergTV

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Bertie Figueres Jul 18, 2023

@acemaxxanalytics
Interesting @acemaxx, thanks. But I think I don't quite get it.

nom GDP and real GDP will be the same at time 0 since at time 0 there is no inflation yet.

I.e. The real prices and nom prices right now are the same because they are both based on prices right now.

So when does this GDP deflator consider to be time 0? It can't be 'now' because it is not 0. So is it start of year or start of the series?

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Bertie Figueres Jul 18, 2023

@acemaxxanalytics
Also, just did a bit of the maths and it seems the Deflator is simply the inverse of the inflation figure. Let me explain.

Deflator = Nom / Real

but,

Real = Nom * Infl

So,

Deflator = Nom / (Nom * Infl)

Giving

Deflator = 1 / Infl

Have I got this right?

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acemaxx

@BertieFigueres
While #inflation measures the change in prices over time (based on a particular consumer basket), the #deflator provides a measure of the overall price level relative to a base year or period.