Purchasing Power Parities

Unlike official market exchange rates which are distorted by price level differences, purchasing power parities (PPPs) - the main output of the International Comparison Programme (ICP) - are currency converters that reflect the real purchasing powers of local currencies. By eliminating the effect of price level differences, they enable the relative comparison of the sizes of Arab economies and the welfare of their inhabitants in real terms.

ICP has become a regular ESCWA activity, which annually produces purchasing power parities, price level indices, and real and nominal total and per capita expenditures at the levels of GDP and its aggregates. This initiative has placed the Arab region in a pioneering position globally.

To improve price statistics in the Arab region and increase price statistics outputs, ESCWA has introduced technology in the collection of price data and the production of subnational PPPs and other new indices. ESCWA is also aligning ICP work with that on regular price statistics programmes, and integrating ICP with other regular national price statistics programmes, such as the Consumer Price Index, by harmonizing item lists, synchronizing data collection, and producing a harmonized consumer price index.

Our approach

Our partners

ESCWA collaborates with various partners in the field of statistics, including the following:   

• The World Bank, which is the global ICP office and donor for ICP activities in the Arab region 

• The United Nations Statistical Commission 

• Partners in other regions include the African Development Bank, the Asian Development Bank, the Interstate Statistical Committee of the Commonwealth of Independent States, and the United Nations Economic Commission for Latin America and the Caribbean 

• Regional organizations, such as the Organization for Economic Cooperation and Development and the Statistical Office of the European Union  

• International organizations, such as the International Monetary Fund 

• Other stakeholders include international, regional and national organizations, Governments, academics, researchers and all users 

Our activities

ESCWA regularly conducts national, subregional and regional workshops and meetings to build the capacity of national statistical offices in its member States. It developed a comprehensive ICP database comprising detailed annual data, as of 2011, on purchasing power parities, price level indices, and real and nominal total and per capita expenditures.

It also developed a first of its kind online interactive PPP converter, which allows users to convert between Arab currencies on the basis of real purchasing power parities instead of official market exchange rates. Moreover, ESCWA released an interactive electronic publication consisting of a comprehensive regional report, covering PPP results for the years 2011 to 2019 along with interactive online videos, charts and illustrations, and links to the ICP database and the online PPP converter.