The full form of PPP in economics is Purchasing Power Parity. PPP is used to compare your country or local currency with other target countries. By using PPP, you can find out the cost of the standard of living in the target country and determine the value of your local currency in that country to maintain or improve your lifestyle.

Definition: purchasing power parity (PPP) is a popular metric used by macroeconomic analysts that compare different countries’ currencies through a “basket of goods” approach. According to this concept, two currencies are in equilibrium known as the currencies being at par when a basket of goods is priced the same in both countries, taking into account the exchange rates.

Meaning: Economists use purchasing power parity (PPP) to measure how much different currencies can buy. This means that two currencies have the same value also called being at par when they can purchase the same amount of goods and services in both countries, after adjusting for the exchange rates.

Purchasing Power Parity Formula: S=P2​/P1​​
S= Exchange rate of currency 1 to currency 2
P1​= Cost of good X in currency 1
P2​= Cost of good X in currency 2​

Example: Imagine you want to buy a burger. In one country, the burger costs 5 dollars. In another country, the burger costs 10 euros. The exchange rate is 1 dollar = 2 euros. Purchasing power parity means that you can buy the same burger for either 5 dollars or 10 euros because they have the same value. If the exchange rate changes, then the value of the currencies changes too. For example, if 1 dollar = 1 euro, then you can buy two burgers for 10 euros, but only one burger for 5 dollars. That means the euro has more purchasing power than the dollar.

The PPP Converter is an online tool that calculates purchasing power parity (PPP) by comparing the exchange rates of all countries. The PPP calculator provides output based on the updated exchange rates of all countries and is linked to the official World Bank API. All the outputs generated by this tool are sourced from the World Bank’s API and data.

The calculator determines the purchasing power of a target country by comparing its currency with the exchange rate, and displays the desired amount in the output. This allows you to determine how much of your local currency is needed in another country to maintain the same standard of living.

The PPP calculator is very user-friendly and can be used on smartphones and tablets. With this tool, you can compare your salary in your currency with that of another country. This will allow you to determine how much money you would need in the other country to maintain your standard of living.

The PPP calculator is an online tool that can be accessed on your device. You can use it to calculate the cost of living in any country worldwide, based on the current exchange rate. Let’s see how you can use it.

1. Go to the homepage of the PPP calculator.
2. Select your home (Source) country.
3. Enter the salary amount or currency of the Local country.
4. Select the country you want to compare purchasing power with.
5. The value (Output) of the respective currency will be displayed in the output.

Advantages of using a PPP Calculator

• It can help you adjust for differences in price levels across countries when comparing income or expenditure indicators.
• It can help you avoid misleading comparisons based on nominal exchange rates that may not reflect the actual value of currencies.
• It can help you understand how changes in prices or exchange rates affect your real income or expenditure over time.

Disadvantages of using a PPP Calculator

• It may not capture all aspects of economic well-being or competitiveness that go beyond income or expenditure indicators, such as quality of life, human development, environmental sustainability, etc.
• It may not account for differences in non-market goods and services that affect economic well-being or competitiveness, such as public goods, and social services.

Purchasing Power Parity Impact

Purchasing power parity can affect you in different ways, depending on whether you are a consumer, a producer, a trader, or a policy maker.

As a Consumer

Purchasing power parity can affect your cost of living and your purchasing power when you travel or buy imported goods. If your currency has more purchasing power than another currency, you can buy more goods and services with the same amount of money. Conversely, if your currency has less purchasing power than another currency, you can buy fewer goods and services with the same amount of money.

As a Producer

Purchasing power parity can affect your competitiveness and profitability in the global market. If your currency has more purchasing power than another currency, your production costs may be higher than those of your foreign competitors, making your products less attractive to consumers. Conversely, if your currency has less purchasing power than another currency, your production costs may be lower than those of your foreign competitors, making your products more attractive to consumers.

As a Trader or an Investor

Purchasing power parity can affect your returns and risks when you deal with foreign currencies or assets. If your currency has more purchasing power than another currency, you may expect that the exchange rate will adjust over time to reflect the difference in price levels, leading to a depreciation of your currency and a loss of value for your foreign assets.

Conversely, if your currency has less purchasing power than another currency, you may expect that the exchange rate will adjust over time to reflect the difference in price levels, leading to an appreciation of your currency and a gain of value for your foreign assets.

As a Policy Maker or an Analyst

Purchasing power parity can affect how you measure and compare economic performance and well-being across countries. If you use nominal exchange rates to convert GDP or other indicators from different currencies into one common currency (such as the U.S. dollar), you may overstate or understate the actual size and growth of economies that have different price levels than the base country.

If you use PPP exchange rates to convert GDP or other indicators from different currencies into one common currency (such as the Purchasing Power Standard), you may eliminate the effect of price level differences and obtain a more accurate picture of economic productivity and standards of living across countries.

Total, National currency units/US dollar, 2010 – 2021. This indicator is measured in terms of national currency per US dollar.

Location	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Albania	42.019	42.817	42.926	44.591	44.898	45.527	44.419	44.630	44.561	44.336	44.197	43.858	43.655	44.114	42.894	42.706	42.386	42.256	42.303	41.144	41.281	42.513	41.452
Argentina	0.664	0.642	0.826	0.895	1.031	1.103	1.217	1.362	1.647	1.888	2.255	2.733	3.218	3.941	5.452	6.867	9.295	10.257	14.228	20.855	28.865	42.721	N/A
Australia	1.312	1.328	1.336	1.352	1.365	1.388	1.403	1.427	1.479	1.443	1.504	1.511	1.540	1.447	1.452	1.474	1.450	1.478	1.470	1.480	1.454	1.448	1.419
Austria	0.907	0.923	0.900	0.888	0.878	0.882	0.860	0.868	0.854	0.844	0.842	0.831	0.814	0.797	0.799	0.799	0.777	0.775	0.765	0.749	0.746	0.756	0.729
Belgium	0.900	0.892	0.873	0.876	0.888	0.892	0.874	0.879	0.867	0.850	0.837	0.832	0.822	0.806	0.800	0.800	0.781	0.776	0.766	0.747	0.730	0.737	0.724
Brazil	0.758	0.802	0.867	0.970	1.018	1.061	1.099	1.139	1.215	1.296	1.388	1.473	1.606	1.701	1.813	1.989	2.133	2.182	2.226	2.280	2.368	2.526	2.530
Bulgaria	0.536	0.556	0.558	0.560	0.580	0.596	0.618	0.656	0.678	0.693	0.677	0.701	0.693	0.680	0.661	0.679	0.667	0.676	0.680	0.686	0.687	0.719	0.762
Cameroon	238.697	239.202	242.066	242.017	236.019	231.948	230.180	225.223	231.902	238.729	237.517	238.707	242.194	241.083	239.119	240.708	237.444	232.801	231.683	230.274	229.137	227.379	N/A
Canada	1.228	1.220	1.229	1.226	1.233	1.214	1.205	1.212	1.234	1.202	1.222	1.240	1.245	1.224	1.230	1.248	1.207	1.212	1.207	1.235	1.231	1.238	1.225
Chile	290.426	296.175	301.372	308.248	321.278	333.690	318.575	323.879	340.401	354.326	359.837	348.017	347.229	349.681	367.214	391.179	397.251	397.689	396.229	401.613	418.446	435.156	443.416
China (People’s Republic of)	2.722	2.717	2.691	2.708	2.821	2.842	2.865	3.006	3.179	3.152	3.329	3.524	3.561	3.664	3.759	3.871	3.989	4.184	4.229	4.208	4.179	4.187	4.022
Colombia	743.255	779.779	819.642	878.847	922.900	961.020	986.397	1 010.403	1 067.501	1 103.812	1 132.203	1 179.998	1 215.696	1 218.821	1 232.889	1 289.324	1 298.143	1 328.017	1 322.161	1 330.757	1 297.100	1 353.380	1 391.000
Costa Rica	144.970	155.557	168.161	182.466	201.419	220.709	241.902	260.308	284.587	310.207	326.842	334.897	343.877	347.807	353.244	353.964	343.014	340.992	337.902	329.112	328.375	343.716	342.717
Croatia	0.503	0.514	0.515	0.529	0.532	0.543	0.520	0.513	0.514	0.510	0.514	0.498	0.486	0.474	0.470	0.466	0.449	0.441	0.439	0.427	0.420	0.432	0.433
Cyprus	0.717	0.712	0.711	0.736	0.734	0.723	0.710	0.694	0.694	0.682	0.700	0.699	0.707	0.687	0.680	0.663	0.622	0.615	0.612	0.597	0.593	0.601	0.595
Czech Republic	14.330	14.324	14.458	14.175	14.426	14.562	14.415	14.257	13.917	13.638	13.673	13.345	13.298	12.785	12.703	12.938	12.576	12.425	12.372	12.274	12.461	12.743	12.925
Denmark	8.670	8.693	8.562	8.647	8.460	8.569	8.288	8.161	7.944	7.731	7.591	7.466	7.564	7.355	7.329	7.305	7.080	6.872	6.766	6.634	6.551	6.590	6.405
Estonia	0.469	0.488	0.486	0.486	0.494	0.503	0.521	0.551	0.545	0.517	0.512	0.512	0.521	0.522	0.527	0.538	0.528	0.535	0.539	0.536	0.524	0.543	0.576
Euro area (19 countries)	0.864	0.860	0.852	0.858	0.856	0.853	0.826	0.820	0.806	0.795	0.793	0.780	0.774	0.756	0.752	0.755	0.730	0.721	0.713	0.695	0.692	0.699	0.685
European Union (27 countries, 2020)	0.831	0.828	0.820	0.821	0.817	0.819	0.795	0.789	0.776	0.755	0.757	0.745	0.738	0.722	0.717	0.719	0.695	0.687	0.678	0.660	0.655	0.663	0.650
Finland	0.984	1.003	0.998	1.002	0.973	0.979	0.953	0.935	0.912	0.896	0.901	0.898	0.908	0.905	0.907	0.908	0.881	0.864	0.854	0.838	0.823	0.827	0.813
France	0.930	0.912	0.901	0.930	0.935	0.916	0.895	0.889	0.882	0.863	0.855	0.841	0.844	0.812	0.808	0.809	0.780	0.770	0.756	0.716	0.710	0.719	0.701
Georgia	0.478	0.493	0.514	0.521	0.550	0.576	0.606	0.646	0.694	0.675	0.762	0.811	0.743	0.725	0.723	0.754	0.748	0.805	0.820	0.847	0.898	0.951
Germany	0.943	0.930	0.913	0.896	0.875	0.873	0.848	0.837	0.820	0.811	0.805	0.789	0.787	0.775	0.769	0.778	0.753	0.745	0.735	0.728	0.725	0.736	0.728
Greece	0.670	0.669	0.663	0.685	0.695	0.709	0.693	0.718	0.708	0.704	0.722	0.713	0.685	0.631	0.611	0.609	0.589	0.575	0.565	0.549	0.544	0.546	0.534
Hong Kong, China	7.111	6.831	6.497	5.989	5.623	5.444	5.252	5.275	5.242	5.189	5.141	5.233	5.454	5.548	5.706	5.831	5.932	6.011	6.086	6.101	6.067	5.875	N/A
Hungary	110.065	114.418	118.141	122.006	128.381	130.930	131.499	134.050	131.005	127.689	126.417	124.272	125.624	124.979	129.415	132.554	132.034	136.037	139.092	140.828	145.351	154.748	164.158
Iceland	84.717	88.304	91.105	92.604	93.286	95.841	101.639	107.347	114.527	121.975	132.888	135.152	136.968	137.023	138.548	141.975	140.030	138.277	140.970	140.697	146.668	149.680	142.764
India	9.675	9.766	9.974	10.159	10.460	10.712	11.264	11.730	12.567	13.366	14.598	15.550	16.161	17.342	18.387	19.235	19.899	20.648	20.949	21.073	21.989	23.215	24.059
Indonesia	1 386.622	1 549.931	1 616.128	1 671.817	1 767.327	1 959.180	2 168.274	2 348.911	2 723.007	2 929.552	3 336.628	3 512.754	3 569.893	3 765.672	4 030.775	4 353.327	4 518.104	4 695.659	4 761.208	4 752.310	4 675.216	4 758.701	4 934.262
Ireland	0.944	0.969	0.982	1.004	0.991	1.012	0.978	0.958	0.944	0.901	0.850	0.832	0.823	0.811	0.819	0.810	0.794	0.794	0.792	0.806	0.796	0.795	0.779
Israel	3.433	3.416	3.463	3.626	3.536	3.717	3.806	3.738	3.867	3.991	3.990	3.945	3.955	3.840	3.940	3.924	3.789	3.752	3.785	3.871	3.838	3.824	3.709
Italy	0.805	0.816	0.823	0.833	0.852	0.855	0.823	0.809	0.784	0.771	0.773	0.759	0.748	0.737	0.740	0.739	0.701	0.690	0.681	0.657	0.648	0.648	0.625
Japan	154.691	149.642	143.774	139.579	134.401	129.552	124.449	120.319	116.846	115.219	111.710	107.454	104.274	101.303	103.052	103.469	105.520	105.102	104.159	104.226	102.428	102.050	97.573
Korea	747.737	756.699	769.772	791.294	794.712	788.920	772.216	770.086	785.718	828.421	840.992	854.586	854.887	869.081	871.878	857.483	858.810	872.625	854.871	856.426	837.673	854.096	831.941
Latvia	0.361	0.353	0.361	0.378	0.399	0.439	0.489	0.566	0.576	0.521	0.487	0.499	0.506	0.499	0.498	0.498	0.485	0.485	0.490	0.487	0.483	0.509	0.519
Lithuania	0.452	0.433	0.421	0.404	0.414	0.435	0.446	0.470	0.493	0.469	0.450	0.452	0.453	0.443	0.443	0.446	0.438	0.443	0.447	0.438	0.444	0.458	0.487
Luxembourg	0.956	0.963	0.957	0.965	0.951	0.946	0.917	0.921	0.900	0.903	0.926	0.905	0.907	0.895	0.884	0.881	0.852	0.848	0.849	0.842	0.856	0.859	0.844
Madagascar	307.018	324.024	371.690	358.286	397.614	456.321	490.318	526.532	555.300	589.996	642.562	694.863	742.898	777.659	823.956	886.091	941.011	1 013.435	1 071.921	1 121.767	1 156.194	1 192.179	N/A
Malta	0.580	0.589	0.582	0.574	0.566	0.573	0.572	0.568	0.572	0.569	0.572	0.574	0.580	0.577	0.586	0.600	0.583	0.586	0.587	0.572	0.569	0.579	0.576
Mexico	6.103	6.329	6.554	6.645	6.986	7.127	7.155	7.370	7.470	7.434	7.680	7.673	7.859	7.884	8.045	8.328	8.446	8.914	9.276	9.663	10.040	10.402	10.377
Morocco	3.968	3.905	3.892	3.857	3.802	3.730	3.675	3.707	3.802	3.783	3.775	3.672	3.750	3.794	4.034	3.996	3.994	4.023	3.972	3.956	3.942	3.860	N/A
Netherlands	0.890	0.905	0.901	0.925	0.908	0.897	0.872	0.860	0.848	0.848	0.854	0.836	0.824	0.798	0.809	0.810	0.795	0.782	0.777	0.779	0.763	0.770	0.764
New Zealand	1.445	1.472	1.469	1.496	1.506	1.535	1.482	1.507	1.491	1.472	1.497	1.486	1.496	1.446	1.441	1.478	1.441	1.431	1.470	1.417	1.414	1.459	1.464
North Macedonia	19.944	20.498	20.015	20.100	19.262	19.293	18.888	19.511	19.264	18.363	18.730	19.289	19.004	19.105	18.996	19.441	18.959	18.970	18.951	18.523	18.642	19.022	19.158
Norway	9.085	9.175	9.057	9.197	9.126	9.005	8.781	8.922	8.859	9.084	9.152	9.083	9.037	9.029	9.278	9.933	10.042	9.750	9.584	9.620	9.880	9.512	8.882
Poland	1.833	1.837	1.800	1.804	1.830	1.868	1.851	1.854	1.842	1.869	1.805	1.801	1.796	1.762	1.767	1.765	1.733	1.743	1.748	1.723	1.747	1.823	1.888
Portugal	0.661	0.671	0.672	0.670	0.676	0.664	0.640	0.647	0.636	0.627	0.623	0.623	0.605	0.584	0.579	0.585	0.571	0.576	0.571	0.559	0.557	0.568	0.556
Romania	0.616	0.814	0.978	1.177	1.269	1.401	1.400	1.488	1.566	1.567	1.538	1.550	1.564	1.606	1.628	1.663	1.597	1.614	1.666	1.661	1.661	1.712	1.779
Russia	7.301	8.323	9.274	9.867	11.557	12.736	12.618	13.985	14.341	14.017	15.821	18.444	19.568	19.506	20.999	23.563	24.192	24.124	24.543	24.838	24.493	27.246	28.804
Saudi Arabia	0.863	0.830	0.866	0.869	0.940	1.095	1.185	1.252	1.445	1.210	1.402	1.586	1.650	1.666	1.646	1.591	1.639	1.649	1.863	1.795	1.620	1.785	N/A
Senegal	218.244	228.365	229.144	222.635	216.522	219.850	219.423	227.726	241.800	236.202	237.141	241.276	245.600	247.212	243.618	242.595	244.658	246.787	239.007	239.649	240.317	236.380	N/A
Serbia	9.599	17.828	20.358	22.635	24.094	27.033	28.829	30.422	31.325	33.261	34.834	36.324	37.982	39.323	39.802	40.737	40.455	40.821	41.004	40.230	40.799	42.392	43.867
Singapore	0.939	0.902	0.880	0.848	0.858	0.848	0.838	0.864	0.836	0.855	0.854	0.847	0.846	0.859	0.864	0.880	0.878	0.886	0.896	0.877	0.841	0.840	N/A
Slovak Republic	0.516	0.516	0.522	0.544	0.564	0.565	0.555	0.554	0.537	0.516	0.502	0.506	0.505	0.491	0.485	0.492	0.503	0.516	0.526	0.518	0.520	0.533	0.539
Slovenia	0.526	0.560	0.583	0.608	0.608	0.610	0.610	0.630	0.634	0.645	0.638	0.624	0.607	0.590	0.591	0.595	0.577	0.570	0.568	0.552	0.547	0.563	0.559
South Africa	2.759	2.909	3.223	3.363	3.473	3.556	3.658	3.856	4.080	4.406	4.620	4.777	5.108	5.296	5.572	5.825	6.159	6.427	6.512	6.694	6.991	7.129	6.981
Spain	0.740	0.748	0.742	0.759	0.766	0.770	0.736	0.732	0.726	0.719	0.727	0.714	0.695	0.675	0.662	0.665	0.643	0.631	0.632	0.613	0.621	0.626	0.608
Sweden	9.162	9.402	9.414	9.486	9.294	9.479	9.112	8.872	8.779	8.921	9.025	8.844	8.655	8.598	8.727	8.854	8.823	8.852	8.866	8.710	8.668	8.722	8.751
Switzerland	1.789	1.769	1.710	1.715	1.692	1.687	1.599	1.532	1.493	1.470	1.466	1.397	1.354	1.312	1.282	1.236	1.202	1.188	1.179	1.150	1.136	1.106	1.052
Türkiye	0.282	0.415	0.591	0.737	0.792	0.835	0.842	0.851	0.880	0.905	0.920	0.966	1.020	1.070	1.105	1.162	1.241	1.384	1.633	1.864	2.164	2.808	4.718
United Kingdom	0.704	0.695	0.690	0.696	0.688	0.708	0.697	0.709	0.702	0.710	0.702	0.706	0.702	0.695	0.698	0.693	0.689	0.685	0.688	0.679	0.686	0.677	0.681
United States	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000
Zambia	0.654	0.802	0.943	1.088	1.268	1.434	1.594	1.753	1.903	1.996	2.247	2.446	2.651	2.833	3.065	3.366	3.879	4.193	4.398	4.651	5.227	6.403	N/A

We hope that you have found our purchasing power parity calculator useful and informative. Our goal is to provide you with a simple and reliable tool that can help you compare your income or expenditure across different countries or regions using the concept of purchasing power parity. Purchasing power parity is an economic theory that compares the prices of goods and services across countries, taking into account the exchange rates.

By using PPP exchange rates, you can adjust for differences in price levels and get a more accurate picture of your economic well-being or competitiveness. However, please note that PPP is not a perfect measure and it has some limitations and challenges. Therefore, you should use our calculator with caution and awareness of its assumptions and data sources. If you have any questions, feedback, or suggestions, please feel free to contact us. Thank you for visiting our website.