Purchasing Power Parities - Overview
What are purchasing power parities?
Purchasing power parities (PPPs) are indicators of price level differences across countries. They indicate how many currency units a particular quantity of goods and services costs in different countries.
PPPs can be used as currency conversion rates to convert expenditures expressed in national currencies into an artificial common currency (the Purchasing Power Standard, PPS), thus eliminating the effect of price level differences across countries.
What information can I find here?
This domain comprises annual data on:
- Purchasing power parities (PPPs);
- Price level indices (PLIs);
- Expenditures (nominal, real, volume indices);
- Convergence indicators.
For more detailed information, including revisions, please see the page 'Information on data' in this section.
For which countries are data available?
Data are available for 37 countries: the 27 EU Member States, the United Kingdom, three member states of the European Free Trade Association (EFTA), five candidate countries and one potential candidate country.
For what purpose are these data used?
The 2 main purposes are:
- To convert national accounts aggregates into comparable volume aggregates. In particular, PPPs can be used to compare the Gross Domestic Product (GDP) of different countries without the figures being distorted by differing price levels in those countries.
- To analyse relative price levels across countries. For this purpose, the PPPs are divided by the current nominal exchange rate to obtain a price level index (PLI) which expresses the price level of a given country relative to others.
This article presents a summary of the results of the International Comparison Program (ICP).
Do you know if the price levels of food, clothes or other goods and services are higher or lower than in the EU and other Member States? Our visualisation tool will show you!
You have a question on PPPs? Have a look at our list of frequently asked questions to see if we already answered it.