Iceland - PPP conversion factor, private consumption (LCU per international $)

The value for PPP conversion factor, private consumption (LCU per international $) in Iceland was 161.16 as of 2020. As the graph below shows, over the past 30 years this indicator reached a maximum value of 166.01 in 2019 and a minimum value of 76.41 in 1990.

Definition: Purchasing power parity conversion factor is the number of units of a country's currency required to buy the same amounts of goods and services in the domestic market as U.S. dollar would buy in the United States. This conversion factor is for private consumption (i.e., household final consumption expenditure). For most economies PPP figures are extrapolated from the 2011 International Comparison Program (ICP) benchmark estimates or imputed using a statistical model based on the 2011 ICP. For 47 high- and upper middle-income economies conversion factors are provided by Eurostat and the Organisation for Economic Co-operation and Development (OECD).

Source: World Bank, International Comparison Program database.

See also:

Year Value
1990 76.41
1991 78.67
1992 79.35
1993 80.27
1994 79.91
1995 79.91
1996 81.91
1997 80.76
1998 83.89
1999 83.91
2000 91.16
2001 96.33
2002 99.88
2003 100.64
2004 101.29
2005 101.34
2006 104.45
2007 107.50
2008 119.17
2009 135.63
2010 141.31
2011 141.37
2012 145.15
2013 148.17
2014 150.10
2015 155.00
2016 159.86
2017 157.51
2018 158.98
2019 166.01
2020 161.16

Development Relevance: In a market-based economy, household, producer, and government choices about resource allocation are influenced by relative prices, including the real exchange rate, real wages, real interest rates, and other prices in the economy. Relative prices also largely reflect these agents' choices. Thus relative prices convey vital information about the interaction of economic agents in an economy and with the rest of the world.

Limitations and Exceptions: Official or market exchange rates are often used to convert economic statistics in local currencies to a common currency in order to make comparisons across countries. Since market rates reflect at best the relative prices of tradable goods, the volume of goods and services that a U.S. dollar buys in the United States may not correspond to what a U.S. dollar converted to another country's currency at the official exchange rate would buy in that country, particularly when nontradable goods and services account for a significant share of a country's output. An alternative exchange rate - the purchasing power parity (PPP) conversion factor - is preferred because it reflects differences in price levels for both tradable and nontradable goods and services and therefore provides a more meaningful comparison of real output.

Statistical Concept and Methodology: PPP rates provide a standard measure allowing comparison of real levels of expenditure between countries, just as conventional price indexes allow comparison of real values over time. PPP rates are calculated by simultaneously comparing the prices of similar goods and services among a large number of countries. In the most recent round of price surveys conducted by the International Comparison Program (ICP) in 2011, 199 economies participated. The PPP conversion factors come from three sources. For 47 high- and upper middle-income countries conversion factors are provided by Eurostat and the Organisation for Economic Co-operation and Development (OECD). For the remaining 2011 ICP countries the PPP estimates are extrapolated from the 2011 ICP benchmark results, which account for relative price changes between each economy and the United States. Extrapolation for private consumption uses the consumer price index. For countries that did not participate in the 2011 ICP round, the PPP estimates are imputed using a statistical model. More information on the results of the 2011 ICP is available at www.worldbank.org/data/icp.

Periodicity: Annual

Classification

Topic: Economic Policy & Debt Indicators

Sub-Topic: Purchasing power parity