On macroeconomic price trends

The price index of the gross domestic product (GDP deflator) is one of the most important inflation indicators within the National Accounts framework. It measures the price development of the total production output of the economy. Last year a remarkable divergence emerged between the GDP deflator and the components of GDP. The price index of GDP increased by 1.8% while the price indices of final demand (consumption, gross investments and exports) grew at a clearly lower rate and the import price index was even regressive. This article shows how the GDP deflator is calculated and how the results are to be interpreted.