The International Comparison Program (commonly known as the ICP) is a worldwide statistical initiative to collect comparative price data and estimate purchasing power parities (PPPs) of the world’s principle economies. Using PPPs instead of market exchange rates to convert currencies makes it possible to compare the output of economies and the welfare of their inhabitants in real terms - that is, controlling for differences in price levels.
The ICP report, 2005 International Comparison Program, brings together the results of two separate PPP programs. The first is the global ICP program conducted by the ICP Global Office within the World Bank, which provided overall coordination for the collection of data and calculation of PPPs in more than 100 (mostly developing) economies. The program was organized in five geographic areas: Africa, Asia-Pacific, Commonwealth of Independent States, Latin America, and Western Asia. Regional agencies took the lead in coordinating the work in the five regions.
In parallel, the Statistical Office of the European Communities (Eurostat) and the Organisation for Economic Co-operation and Development (OECD) conducted its 2005 PPP program that included 46 countries. Eurostat covered 37 countries - the 25 EU member states, the EFTA countries (Iceland, Norway and Switzerland), Bulgaria, Romania, Turkey, Croatia, Macedonia, Albania, Serbia, Montenegro and Bosnia-Herzegovina. The OECD part of the program included nine other countries – its seven non-European member countries, Russia and Israel.
The ICP Global Office has combined the results from each of the five regions with those from the OECD/Eurostat PPP Program into an overall global comparison, so that results for all participating countries can be compared directly. Methodology to compare regions, the ring comparison, was developed specifically to link the regional PPPs without changing the relative results within a region.
For more information on the background, click here.