Switch to desktop mode for a better experience.

Worldwide Implied PPP conversion rate from 1980 to 2029, by countries

UID: EC-20240819-WORLD-04

Download

Meta Data

Source

IMF

Last Updated

August 19, 2024

Time Range

1980 – 2029

Periodicity

Annual

Overview

Purchasing Power Parity (PPP) is an economic theory which compares the relative value of different currencies. It is based on the idea that in the absence of transportation costs and other barriers, identical goods or services should have the same price in different countries when measured in a common currency. PPP is a crucial concept in international economics, as it allows for a more accurate comparison of economic data, such as GDP, across countries with different currencies and living costs.

The Implied PPP Conversion Rate represents the amount of a country’s national currency needed to purchase the same quantity of goods and services as one international dollar (also known as a PPP dollar). This rate is derived from the actual prices of a standard basket of goods and services in different countries and is used to adjust nominal values into comparable international figures. The Implied PPP Conversion Rate is calculated by comparing the price of a specific basket of goods and services in different countries to the price of the same basket in the United States, expressed in U.S. dollars. Implied PPP Conversion Rate = (Price of Basket in National Currency / Price of Basket in USD).

Trends & Insights

Based on the 2024 implied PPP (Purchasing Power Parity) conversion rates, several critical economic insights emerge. Iran demonstrates the highest implied PPP conversion rate at 115.67 thousand, which is significantly higher than other nations. This extreme rate likely reflects Iran’s current economic challenges, including international sanctions, high inflation rates, and the substantial gap between official and market exchange rates in 2024. Zimbabwe’s second-place position with a rate of 16.56 thousand, though much lower than Iran’s, still indicates significant currency valuation challenges. This rate reflects Zimbabwe’s ongoing monetary issues, though it shows some improvement from its historical hyperinflation episodes. The considerable gap between Zimbabwe and the third-ranked Vietnam (7.21 thousand) underscores the exceptional nature of Iran and Zimbabwe’s currency situations.

Among Asian economies, Vietnam and Indonesia (4.76 thousand) show relatively high PPP conversion rates, suggesting that their domestic purchasing power differs significantly from international market valuations. This could indicate undervalued currencies relative to their actual domestic purchasing power, potentially benefiting their export competitiveness but also reflecting economic development challenges. Laos (4.3 thousand) shows similar characteristics to its Southeast Asian neighbors.

African nations feature prominently in the top ranks, with Sierra Leone (6.15 thousand) and Guinea (4.36 thousand) showing high conversion rates. This pattern suggests persistent currency valuation challenges in these African economies, potentially reflecting structural economic issues, including inflation and exchange rate management challenges.

The lower rates seen in Uzbekistan (3.12 thousand), Paraguay (2.76 thousand), and Colombia (1.61 thousand) indicate relatively more stable currency relationships with international standards, though still showing significant PPP adjustments. Colombia’s position with the lowest rate among these countries suggests a more aligned currency valuation with international markets, potentially indicating more effective monetary policies and economic stability compared to the other nations listed.

T&Cs for reusing this data 

All data, visualizations, and code generated by 360 Analytika are fully open access. You are free to use, distribute, and reproduce these materials in any medium, provided proper credit is given to the source and authors. We kindly request that you include a backlink to our website/article, when using these materials.

Citation

Please cite this article using proper attribution to 360 Analytika when referencing or sharing our content.

International Monetary Fund. Worldwide implied PPP conversion rate from 1980 to 2029, by countries (360 Analytika, Ed.) [Dataset]. 360 Analytika. https://360analytika.com/worldwide-implied-ppp-conversion-rate-by-countries/

Other Data Explorers