Purchasing power

The definition of Purchasing power parities (PPP) is the currency-conversion factor corresponding to the purchasing power of the individual currencies.

Purchasing power

The definition of Purchasing power parities (PPP) is the currency-conversion factor corresponding to the purchasing power of the individual currencies. They are used to calculate figures expressed in purchasing power standards (PPS). In other words, a certain amount, converted from different currencies by means of PPP factors, will buy the same amount of goods and services in all the countries. Following conversion, figures are expressed in PPS.

PPS calculations are used to compare social expenditure and compensation rates for life situations, as described above.

The PPS calculations are in PPS (EU27=1) regarding private consumption (based on 2015 estimates).

Purchasing power parities (PPP) for the Nordic countries

The following list presents the purchasing power parities for each of the Nordic Countries as defined by OECD.

However, an independent PPS has not been calculated for the Faroe Islands. For this reason, this publication uses Danish PPS, as both countries use the same currency.

Overview of purchasing power parities