Download Purchasing Power Parities: Statistics to Describe the World

International Comparison
Program 2005
Preliminary Results
17 December 2007
1
What are PPPs?
 Purchasing Power Parities (PPPs) convert
values in local currency prices to “real” values
in a common currency.
 They are based on multilateral comparisons of
prices between countries.
 They permit the comparisons of real levels of
output or income between countries, just as
price deflators or a consumer price index allow
real comparisons over time.
2
How are PPPs used?
 1993 System of National Accounts calls for real
comparisons between countries to be done using
PPPs.
 The World Bank uses PPPs as an input to
establish international poverty lines and compare
standards of living.
 IMF and World Bank publications report the size of
economies and aggregate growth rates in PPP
terms.
 EU allocates structural funds to member states.
 UNDP includes GNI measured at PPP in the
Human Development Index.
3
ICP 2005: What has been achieved
 Most intensive effort ever to measure PPPs.
 New methodology and improved data collection
for better data quality.
 National accounts reviewed and improved.
 China for the first time; India first since 1985.
 New governance arrangements.
 Framework established for continuous
improvement.
4
OECD Eurostat
Latin
America
W. Asia
Ring
Total consumption
General Government
Construction
Equipment
CIS
Food and non - alcoholic beverages
Alcoholic beverages and tobacco
Clothing and footwear
Housing and utilities
Furnishing and household equipment
Health
Transportation
Communication
Recreation and Culture
Education
Restaurants
Misc. .goods and services
Asia
Category
Africa
Scope and coverage of data collection
356
41
128
21
95
144
55
19
49
7
51
34
223
19
78
17
85
112
65
19
70
7
25
56
198
20
104
22
91
75
47
16
79
7
45
36
422
72
319
64
460
244
365
81
336
5
117
136
147
8
136
18
77
51
33
8
54
10
14
22
353
21
162
12
83
69
29
12
59
11
20
31
281
30
132
35
124
162
96
28
96
7
60
44
1000
50
34
108
776
50
34
108
740
50
34
108
2621
50
34
108
578
50
34
108
862
50
34
108
1095
50
34
108
5
Organization
the ICP
ICP
Organization of
of the
ICP under auspices
of the UN Statistical
Commission
ICP Executive Board
Global Office
World Bank
Africa
(48 countries)
Asia &
Pacific
(23 countries)
CIS
(10 countries)
South
America
(10 countries)
Technical Advisory
Group
West Asia
(10 countries)
Eurostat/
OECD
(45 countries)
6
Historical global ICP participation
Number of countries participating
146
7
A snapshot of the world in 2005
Purchasing Power Parities
 Size of the world
 Economic well being
 Relative living costs
8
A new view of world economy
World Share of GDP
World Share of GDP
Based on market exchange rates
Based on PPP
Low-income
economies, 7%
Low-income
economies, 2%
Middle-income
economies, 19%
Middle-income
economies, 32%
High-income
economies, 78%
High-income
economies, 61%
9
The size of the world economy
ICP 2005
GDP @PPP
Previous
GDP @PPP
GDP
@ Market
exchange
rates
World---146 countries
54,980
59,712
44,306
High income: OECD
31,422
31,726
33,342
964
1,264
486
10,971
16,367
4,221
China
5,333
8,819
2,244
India
2,341
3,779
779
CIS
2,269
2,171
968
South America*
2,698
2,911
1,411
West Asia
1,158
932
588
GDP 2005 ($ billions)
Africa*
Asia and Pacific*
* Excludes oil-exporting countries.
Note: Regional totals do not include all ICP participants.
10
People and their spending
70
60
50
World Population (%)
40
30
20
World PPP GDP (%)
10
0
Low
Middle
High
11
The largest dozen
 Twelve economies account for two-thirds of
world expenditures.
 The five largest are US, China, Japan, Germany,
and India.
 Seven are high income economies: US, Japan,
Germany, the UK, France, Italy, and Spain.
 And five are low- or middle-income economies:
China, India, Russia, Brazil, and Mexico.
12
Economic well being –
PPP consumption per capita
PPP- Based Actual Individual Consumption per capita, $
30,000
25,000
20,000
15,000
10,000
5,000
0
Eurostat/OECD
CIS
South America
Western Asia
Asia/Pacific
Africa
13
The richest economies
GDP per capita
Consumption per capita
 Luxembourg
 Luxembourg
 Qatar
 United States
 Norway
 Iceland
 Brunei Darussalam
 United Kingdom
 Kuwait
 Norway
14
And the poorest economies
GDP per capita
Consumption per capita
 Congo Dem Rep
 Congo Dem Rep
 Liberia
 Liberia
 Zimbabwe
 Zimbabwe
 Guinea Bissau
 Guinea Bissau
 Ethopia
 Ethopia
15
Average PPP consumption across
146 economies
PPP consumption per capita (US$)
35,000
20,000
5,000
1,000
30,000
25,000
20,000
World
Average
6,096
15,000
10,000
5,000
0
16
Comparing price levels
 Price level indexes are the ratio of an economy’s
PPP to its exchange rate with another economy
 Measure cost of living or cost of doing business
 Or simply the most expensive or cheapest
places to travel
17
Most and least expensive
Most expensive
Least expensive
 Iceland
 Tajikistan
 Denmark
 Ethiopia
 Switzerland
 Gambia
 Norway
 Kyrz Republic
 Ireland
 Bolivia
18
Higher prices in rich countries
200
Iceland
Denmark
Switzerland
Norway
Price level index (World=100)
180
160
Japan
140
United States
120
Fiji
100
80
Brazil
60
Congo, D.R.
China
40
India
20
Bolivia
0
GDP per capita
19
What is being released?
 Press release with summary of results for the GDP plus
background material.
 2005 International Comparison Program—Preliminary
results:
 Tables showing PPPs, nominal and real expenditures, nominal
and real per capita measures, and price level indices for Actual
individual consumption, collective government consumption and
gross fixed capital formation.
 Summary of major findings.
 Technical notes describing methodology and procedures.
 Annexes with history of the ICP, governance, other technical
matters, glossary, and brief references.
 More detailed data to be released in February 2008
www.worldbank.org/data/icp
20
Thank you!
www.worldbank.org/data/ICP
21
What is being released?
 Press release with summary of results for the GDP plus
background material.
 2005 International Comparison Program—Preliminary
results:
 Tables showing PPPs, nominal and real expenditures, nominal
and real per capita measures, and price level indices for Actual
individual consumption, collective government consumption and
gross fixed capital formation.
 Summary of major findings.
 Technical notes describing methodology and procedures.
 Annexes with history of the ICP, governance, other technical
matters, glossary, and brief references.
 More detailed data to be released in February 2008
www.worldbank.org/data/icp
22