What does GDP at PPP Mean?
By BYJU'S Exam Prep
Updated on: November 9th, 2023
GDP at PPP means Gross Domestic Product (GDP) per capita based on purchasing power parity (PPP). Purchasing power parity rates are used to convert GDP to foreign currencies. The base year for national accounts was changed by the government in January 2015 from the prior base year of 2004-05 to the new base year of 2011-12. The base year for national accounting had already been altered in January 2010.
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Meaning of GDP at PPP
Gross domestic product (GDP) is a monetary indicator of the total market value of all the final goods and services that nations produce and sell over a given time period. This measurement is frequently changed before it can be trusted as an indicator because of how complicated and subjective it is.
- The Gross Domestic Product (GDP) at factor cost was abandoned in favor of the gross value added (GVA) at basic prices adopted by other countries in the new series by the Central Statistics Office (CSO).
- The economy’s growth rate for 2013–14 was expected to be 6.9% based on the new base year; it was 4.7% based on the 2004–05 base.
- Similarly to this, the growth rate for 2012–13 increased from 4.5% to 5.1%.
Gross domestic product is translated into foreign currency using purchasing power parity rates to create PPP GDP. The purchasing power of a global dollar is equivalent to that of the US dollar in the US in terms of GDP.
Summary:
What does GDP at PPP mean?
GDP represents Gross Domestic Product (GDP) based on each person’s buying power parity (PPP). Purchasing power parity rates are used to translate GDP to foreign currencies. GDP is used as an indicator or measure of the market value of goods and services produced and sold at a specific time period in a country.
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