Australian (ASX) Stock Market Forum

# Calculating real GDP?

#### svetsi

I know what both of these are (Real and Nominal GDP) but I'm trying to figure out how the ABS got these figures. I know nominal GDP is adjusted for inflation so I've included the CPI Change and the CPI deflator below. I don't suppose anyone can show me how the ABS got their real GDP figure below? Thanks

Date ------GDP Nominal ------ GDP Real
Sep-1959 --- 60097 ------ 56905
Dec-1959 --- 60734 ----- 57801
Mar-1960 --- 61516 ------ 58751

Date------- CPI change
Sep-1959 ----- 1.40
Dec-1959 ----- 1.40
Mar-1960 ----- 0.00
Jun-1960 ----- 1.30

Date------- CPI
Sep-1959 ------ 7.4
Dec-1959 ------ 7.5
Mar-1960 ------ 7.5
Jun-1960 ------ 7.6

#### greggles

##### I'll be back!
Real GDP is GDP evaluated at the market prices of some base year. For example, if 1990 were chosen as the base year, then real GDP for 1995 is calculated by taking the quantities of all goods and services purchased in 1995 and multiplying them by their 1990 prices.

#### svetsi

I know what both of these are (Real and Nominal GDP)
As mentioned!

#### greggles

##### I'll be back!
If there's no indication on the document itself as to the base year then you might be able to work it out yourself by examining the inflation figures in the surrounding years and attempting to calculate it based on them.

#### svetsi

I'm not understanding?
I would have thought that if in Sep-1959 the GDP Dollar value (Nominal) is 60097 and the
rate of inflation for that quarter was 1.4% then you would multiply 60097 by (1-(1.04/100)) which gives me a figure of 59256 and not 56905 as the ABS data suggests.