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Purchasing Power Parities

Purchasing power parities are types of currency exchange rates that are used to convert economic indicators expressed in local currencies to a common conventional currency. Through the elimination of differences in price level between all countries taking part in the survey, they enable direct comparison of GDP and its main elements. Purchasing power parities are computed among others in the frames of the international comparisons programme carried out by the European Union, the OECD and also the World Bank, using a basket of comparable goods and services. Purchasing Power Standard (PPS) is a common conventional currency adopted by the European Union, whereas international dollar is used by the World Bank. Value of one PPS (or international dollar) is equal to the number of units of currency of a given country corresponding to 1 euro (or 1 international dollar) on the domestic market, taking into account the ratio of prices in a given country to prices in all other countries participating in the comparisons.

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Statistics Poland