Saturday, April 3, 2010

Purchasing Power Parity (PPP)

1. Anybody involved with trade and comparing important economic statistics between countries would be interested in the PPP calculation. Calculating PPPs is the first step in the process of converting the level of GDP into a common currency to enable comparisons to be made.

2. The Organization for Economic Cooperation and Development and Eurostat are responsible for calculating PPPs. Eurostat calculates it for the European Union countries while the OECD calculates it for all other countries. PPPs are calculated at the end of each year but are published every 3-5 years.

3. Consumer prices in the OECD area rose by 1.9% in the year to February 2010, down from 2.1% in January. Consumer prices for food in the OECD area fell by 0.3% in the year to February 2010, following a fall of 0.7% in January.


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