What is Real GDP?

Real GDP Real GDP is an inflation-adjusted measure that reflects the quantity of goods and services produced by an economy in a given year, with prices held constant from year to year to separate out the impact of inflation or deflation from the trend in output over time. Since GDP is based on the monetary value of goods and services, it is subject to inflation.

Rising prices will tend to increase a country’s GDP, but this does not necessarily reflect any change in the quantity or quality of goods and services produced.