GDP Price Deflator

GDP Price Deflator

A ratio of nominal GDP to real GDP expressed as a percentage. The GDP price deflator is used as a measure of the inflation rate; it does not account for price changes in commodity baskets like the Consumer Price Index. Rather, it shows changes in GDP compared with a base year.
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The overall GDP price deflator, a broad measure of inflation, increased by 1.
But an upward revision in the GDP price deflator, a measure of inflation, later fueled expectations for accelerated interest rate hikes, encouraging some players to buy back the dollar.
A drop in the price of imports, for instance, will, other things equal, lead to an increase in the GDP price deflator.
This kind of effect is typically buried in the GDP price deflator, but, even though it will generally be small, it is a real effect that needs to be identified and considered separately.
This divergence is precisely due to the improving terms of trade, since, as we have seen earlier, a drop in the relative price of imports tends to raise the implicit GDP price deflator, but, being excluded from its calculation, it has no such effect on the GNE deflator.
In contrast, real transfers to households are assumed to be a cyclical, depending only on potential GDP; nominal transfers are obtained using the GDP price deflator.
15) The fuel tax rate is specified on a per-barrel basis, and the value of the tax per barrel is indexed to the GDP price deflator but not to the current price of fuel.
Short-term prospects 1995 1996 1997 Per cent change, annual rate Private consumption 2 1/4 2 3/4 3 Government consumption 0 0 0 Gross fixed investment 7 1/2 7 6 1/2 Total domestic demand 3 1/4 3 1/2 3 1/2 Exports of goods and services 9 3/4 9 8 3/4 Imports of goods and services 9 3/4 10 9 1/4 Foreign balance(1) -1/4 -1/2 -1/2 GDP at constant prices 3 1/4 3 3 GDP price deflator 4 1/4 3 1/2 3 Private consumption deflator 4 3/4 3 1/2 3 Memorandum items: Non-farm business sector: Unit labour costs 3 3 2 1/2 Productivity 1/2 1 1 1/4 Employment 2 1/2 1 3/4 1 3/4 Unemployment rate (per cent) (22 3/4) (22) (21 1/4) Per cent of GDP Current external balance(2) 0 -1/4 -1/2 Government net lending(3) -6 -5 -4 of which: Gross saving -2 -1 1/2 -1/2 Primary balance -1 3/4 -1/4 1/2 1.
increase in 1989 of the GDP price deflator at market prices (14.
On the assumption that profit margins will increase somewhat and that budgeted increases in indirect taxes are realised, the GDP price deflator is projected to rise by 3 3/4 per cent in 1994.