Nominal GDP
The total value of an economy's output measured at current market prices, unadjusted for inflation.
What is Nominal GDP?
Nominal GDP is the total market value of all final goods and services produced in a country during a given period, measured at the prices that prevailed during that period — without any adjustment for inflation. Because nominal GDP reflects both real changes in output and changes in the price level, a rising nominal GDP can result from actual economic growth, from inflation, or from both. To compare economic performance across different time periods or to measure real growth, economists use real GDP, which adjusts nominal GDP using a price deflator. Nominal GDP is used to measure the absolute size of an economy and calculate debt-to-GDP ratios, since government debt is also measured in nominal terms.
Example
U.S. nominal GDP was approximately $27.4 trillion in 2023 and $29.4 trillion in 2024. However, a portion of that $2 trillion increase reflected inflation rather than real output growth. After adjusting for price changes, U.S. real GDP growth was about 2.8% in 2024 — meaning roughly half the nominal increase represented inflation rather than additional goods and services produced.