Question

Explain difference between gdp deflator or inflation rate.
does gdp deflator help us estimate the inflation rate?​

Answer 1

After 2009 inflation rate is also calculated on the basis of CPI. On the other hand GDP deflator is a broader concept. CPI is computed using a fixed basket of goods, whereas GDP deflator allows the basket of goods to change over time as composition of GDP changes.

The GDP price deflator measures the changes in prices for all goods and services produced in an economy. The GDP deflator is a more comprehensive inflation measure than the CPI index because it isn't based on a fixed basket of goods.