The first thing that you need to do to calculate GDP deflator is to determine the value of the Nominal GDP, which is basically the GDP that you want to compare. In order to calculate this value, you need to sum the quantities of all final goods and services purchased during a particular year after multiplying them by their respective prices in that year.
Next, you need to calculate Real GDP, which you will basically be using as a point of reference. To determine the Real GDP, you need to choose a base year and then use the pricing of different products and services in that year to determine the total sum of consumer expenditures on durable and non-durable goods and services, sum of expenditures on investments, sum of all government spending on goods and services and the difference between imports and exports for the year that you are calculating the Real GDP of.
After you have determined the values of both Nominal GDP and Real GDP, use the two values in the GDP deflator formula, which is “Nominal GDP divided by Real GDP multiplied by 100.”
The resulting value will be the GDP deflator value.