Rising domestic product does not yet mean that the economy has actually produced more to the extent indicated. The growth may be due in whole or in part to increased prices. The domestic product valued at actual prices is called the nominal domestic product.
If one wants to find out the actual additional output of an economy, one has to subtract the price increases from the nominal domestic product. Then you get the real domestic product. Adjusting the nominal domestic product for the respective inflation rates is what statisticians refer to as deflation.
Since 2005, the calculation of the development of real economic output is no longer in prices of a fixed base year (the last base year was 1995), but in the prices of the previous year. In order to map long-term price changes, the price changes are linked to one another, ie the price changes from 2006 relate to 2005, those from 2005 to 2004, etc. Hedonic price determination is also used to determine the annual price change rates.