The International Comparison Program (ICP) is the world's largest statistical initiative. It produces internationally comparable price levels, economic aggregates in real terms, and Purchasing Power Partity estimates. The ICP uses a series of statistical surveys to collect price data for a basket of goods and services. For meaningful inter-country comparisons, the ICP considers the affordability and price level of necessities and luxuries, which exchange rates ignore.
Surveys are held every three to five years, depending on the region. The data collected are combined with other economic variables from countries’ national accounts to calculate Purchasing Power Parities or PPPs, a form of exchange rate that takes into account the cost and affordability of common items in different countries, usually expressed in the form of US dollars.
By using PPPs as conversion factors, the resulting comparisons of GDP volumes enable us to measure the relative social and economic well-being of countries, monitor the incidence of poverty, track progress towards the Millennium Development Goals and target programs effectively.
PPPs also assist international markets by identifying the relative productivity and investment potential of different countries.
The ICP involves many players from national, regional and international agencies and is overseen by a Global Office housed in the World Bank. National Statistical Offices implement the program on the ground, under the general guidance and coordination of regional agencies.
Established in 1968, the ICP has grown to cover all regions of the world and is now the largest international data collection exercise involving five regions and 107 countries. The results will be combined with the OECD/Eurostat PPP program for 43 countries, bringing the total to about 150 benchmark countries.
The OECD, in collaboration with the European Commission, spearheads the program in member countries while the World Bank coordinates activities for the rest of the world.
Click here for the History of ICP.