The 2011 Round

The International Comparison Program (ICP) is being implemented as a true global initiative for the second time, with the reference year 2011. It builds on well programmed activities of a wide network of national and bi- and multi-lateral institutions that will engage in methodological research and review, survey activities and data processing and analysis in the areas of price statistics and national accounts and related fields with a view to estimating purchasing power parities (PPPs) of the world’s principal economies.

The 2011 round of the International Comparison Program (ICP) will leverage on the successful implementation of the 2005 round which, based on a concerted effort by international and national statistical agencies, was better planned, managed and coordinated than ever.

The ICP Global Office will work to broaden the scope of the program, streamline quality assessment processes, improve the poverty relevance of PPP statistics, ensure the sustainability of PPP delivery, and enhance statistical capacity building activities related to the generation of ICP basic data with a specific focus on price statistics and the implementation of the System of National Accounts (SNA-2008).

Objective

Measuring the Real Size of the World Economy

The International Comparison Program (ICP) is a worldwide statistical partnership to collect comparative price data and compile detailed expenditure values of countries' Gross Domestic Products (GDP), and to estimate Purchasing Power Parities (PPPs) of the world's economies. Using PPPs instead of market exchange rates to convert currencies controls for price level differences and other distortions in order to compare the output of economies and the welfare of their inhabitants in real terms.

Purchasing Power Parity (PPP)

A PPP between two countries, A and B, is the ratio of the number of units of country A's currency needed to purchase in country A the same quantity and quality of a specific good or service as one unit of country B's currency will purchase in country B.

PPPs can be expressed in the currency of either of the countries. In practice, they are usually computed among large numbers of countries and expressed in terms of a single currency, with the U.S. dollar (US$) most commonly used as the base or "numeraire' currency.

ICP Governance

The ICP is conducted under the auspices of the UN Statistical Commission. An ICP Executive Board, consisting of eminent representatives from partner organizations and other stakeholders from around the world, provides the policies and guidance for the overall program. The ICP Global Office in the World Bank is responsible for the development and improvement of methodologies, coordinates the work program across the ICP regions, and combines the regional and Eurostat-OECD results to the global level.

The ICP Regional Coordinating Office at UNESCWA is responsible for the implementation of the program in Western Asia region, in coordination with the World Bank Global Office and in synchronization with other regions.

Major Uses of PPPs:

Major uses of the PPP results at international and regional levels include:

- International poverty headcount index (World Bank)
- Comparing relative sizes of economies and estimating weighted averages of regional growth rates (IMF)
- Allocation of structural and cohesion funds (European Commission)
- Human Development Index (UNDP)
- Gender empowerment measures (UNDP)
- Health inequality assessment (World Health Organization)
- Assessing per capita expenditures in education (UN Educational, Scientific and Cultural Organizations)
- Monitoring the welfare of children (UN Children's fund)
- Designing effective aid programs (International Organizations)

Other uses include:

- Analysis of an economy's comparative advantage on prices and expenditures of goods or services (Policy Makers)
- Evaluation of investment costs and industry growth potential across countries
- PPP adjusted cost of living allowances (Multinational Corporations, Non-Government Organizations, International Development Agencies)

ICP 2011 - A round of Innovations

More than 170 countries and more representative products for better comparability

Five main innovations are being introduced:

- An ICP quality assurance framework
- An ICP Book titled "Measuring the Size of the World Economy"
- A New National Accounts framework for ICP
- A system of economic validation of price and expenditure data
- Continuous improvements in ICP methodologies