Global purchasing power parities (PPP) and real expenditures from the 2005 International Comparison Programme (ICP) were released recently. The report of the 2005 ICP round is located on the World Bank website.
The ICP is a worldwide statistical undertaking, overseen by the World Bank, to collect comparative price data and estimate PPPs. PPP results are used to make inter-country comparisons of price levels and measures of output and welfare between about 150 countries. Statistics New Zealand facilitates New Zealand’s participation, via the Eurostat-OECD PPP programme. Two previous articles in Price Index News have outlined Statistics NZ's involvement in the Eurostat-OECD PPP programme and presented New Zealand's latest results.
PPPs are an important measure used in cross-country comparison of well-being and poverty analysis. PPPs also assist international markets by identifying the relative productivity and investment potential of different countries. International comparisons increasingly use PPP measures, rather than exchange rates, and the latest PPP measures are generally accepted as the best yet. The August 2008 issue of the ICP Bulletin includes an interesting article on how business could use PPIs. The issue also presents two articles by prominent economists; one reflects on the 40-year history of the programme and looks forward to the future, and the other outlines a new method for linking regional PPPs.
New Zealand is one of 13 invited countries currently participating in the ICP Friends of the Chair (FOC) working group. The group was commissioned by the United Nations Statistical Commission, alongside international agency representatives from the World Bank, International Monetary Fund, OECD, and Eurostat. The group was established to evaluate the current ICP scope and activities, and to make a proposal on the desirability of a new round. The FOC supports the continued production and development of PPP measures and has recommended the commencement of a further ICP round.
Back to Price Index News: September 2008