Purchasing power parities (PPPs), price level indices and real expenditure

Purchasing power parities (PPPs) reflect price levels in different countries. PPPs make it possible to measure the value of a country’s currency within its economy by comparing the quantities of goods and services that can be purchased with that currency.

Purchasing power parity indicators are designed to highlight differences between countries or other geographical regions over a specific time period.

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• Regulation (EC) No 1445/2007 of the European Parliament and of the Council establishing common rules for the provision of basic information on Purchasing Power Parities and for their calculation and dissemination (PPP regulation);
• Commission Regulation (EU) No 193/2011 implementing Regulation (EC) No 1445/2007 of the European Parliament and of the Council as regards the system of quality control used for Purchasing Power Parities;
• Commission Regulation (EU) No 2015/1163 implementing Regulation (EC) No 1445/2007 of the European Parliament and of the Council as regards the list of basic headings used for Purchasing Power Parities;
• Commission Regulation (EU) No 2024/3171 amending Regulation (EC) No 1445/2007 of the European Parliament and of the Council as regards the list of basic headings used for Purchasing Power Parities.

Statistics database

"Statistics Explained" articles:

• Comparative price levels for food, beverages and tobacco;
• Comparative price levels for investment;
• Comparative price levels of consumer goods and services;
• GDP per capita, consumption per capita and price level indices;
• Purchasing power parities and GDP per capita - preliminary estimate;
• Purchasing power parities in Europe and the world.
   

Dedicated section on PPPs is published in Eurostat website.

Eurostat publishes wider coverage of analytical categories and indicators. The published results are available on the Eurostat homepage.

PPPs are spatial price level indicators, and thus primarily suitable in comparisons referring to several geographical locations at a given point in time. 

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Data required for PPP calculations on general government expenditures for education are extracted by Eurostat from the UNESCO-OECD-Eurostat database (once per year).
Basic information for PPP calculations is provided by surveying retail outlets, service provision sites and conducting sample surveys of enterprises. Calculations are made using data available to institutions.

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Eurostat carries out calculations every year. The peculiarity of the respective surveys hides in the correlation of the information provided by the countries involved in the comparisons and its impact on the results. Unlike in other statistical surveys, an individual country may not obtain comparison results on its own, and changes in the data of one country also affect the results of other countries.

Eurostat calculates and publishes the final annual results no later than 36 months after the end of the reference year.