What is GDP deflator?

GDP deflator measures the ratio of nominal GDP to real GDP, expressed as a percentage.

$$\text{GDP Deflator} = \dfrac{\text{Nominal GDP}}{\text{Real GDP}} \times 100$$GDP Deflator=Real GDPNominal GDP​×100

---

The base year is 2020, with a price of Rs 10 per kg.

Nominal GDP in 2021 (at current year prices):

$$= 110 \times 15$$=110×15

$$= \text{Rs } 1650$$=Rs 1650

---

Real GDP in 2021 (at base year prices):

$$= 110 \times 10$$=110×10

$$= \text{Rs } 1100$$=Rs 1100

---

$$\text{GDP Deflator} = \dfrac{1650}{1100} \times 100$$GDP Deflator=11001650​×100

$$= 150\%$$=150%

---

The GDP deflator is 150 percent.