European Comparison Programme
The European Comparison Programme is a Eurostat project designed to provide internationally comparable data on selected economic indicators, in particular gross domestic product (GDP) and actual individual consumption of households. These indicators are compiled in accordance with a harmonised international methodology and are therefore comparable across countries. As statistical data are primarily compiled and disseminated in national currencies, their use for international comparison requires conversion into a common unit.
The use of major currencies, such as the euro (EUR) or the US dollar (USD), for this purpose is subject to certain limitations, as exchange rates do not adequately reflect differences in the overall price levels of goods and services within individual economies. Even within a single-currency area, such as the euro area, price levels differ across countries. Consequently, one euro may purchase different quantities of goods and services in different Member States. For the purposes of international comparison, it is therefore more appropriate to use indicators expressed in purchasing power standards (PPS).
The purchasing power standard is an artificial currency unit that has the same purchasing power in all participating countries. In practical terms, 1 PPS represents the same volume of goods and services in each country. The conversion of values from national currencies (for example, CZK) into PPS is carried out using purchasing power parities (PPPs), which express the relationship between price levels across countries.
The calculation of purchasing power parities is based on close cooperation between national statistical institutes and Eurostat. National statistical institutes provide Eurostat with detailed breakdowns of the relevant expenditure aggregates and, at the same time, collect prices for selected products. In the Czech Republic, this data collection is co-financed by a Eurostat grant. The calculation itself is carried out by Eurostat and is based on multilateral comparison. Further methodological information is available in the methodological manual: https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/w/ks-gq-24-011
The results are disseminated through Eurostat’s database and other Eurostat publications. The principal indicators include gross domestic product and actual individual consumption of households per capita expressed in PPS. The results are frequently presented in the form of volume indices, where the EU27 average equals 100. In addition, the statistics provide a range of other indicators, including comparative price level indices. Further information is available in the following Eurostat publication: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=GDP_per_capita,_consumption_per_capita_and_price_level_indices
