2005 ICP Regional Summary: Europe and Central Asia

2005 ICP Regional Summary: Europe and Central Asia

Overview

Twenty fourcountries from the Europe and Central Asia(ECA) region participated in the 2005 ICP. Ten countries participated in the CIS program coordinated by the Statistical Office of the Commonwealth of Independent States (CISSTAT), the State Statistical Service of the Russian Federation (ROSSTAT),and the Bureau of Economic Analysis (Moscow). Fourteen countries participated in the Eurostat/OECD program. The Russian Federation participated in both programs.

All regional values shown below include only countries that participated in the 2005 International Comparison Program.

Size of the economy

PPP-based GDP figures indicate that the ECA economies account for 7.5 percent of the world economy as opposed to 4.6 percent based on GDP converted to US dollars using market exchange rates.The Russian Federation is the largest economy in the region and accounts for 41 percent ofECA’s GDP and one-thirdof its population.

Living Standards

The region’s GDP per capita is $9661 in PPP terms.Hungary, SlovakRepublic, and Lithuaniahave the highest GDP per capita in the region and Tajikistan, KyrgyzRepublic, and Moldova the lowest.

Actual Individual Consumption

Actual individual consumption is measured by the total value of household final consumption expenditure, expenditures by non-profit institutions (such as NGOs and charities) serving households, and government expenditure on individual consumption goods and services (such as education or health).Although only ten countries in the ECA region have GDP per capita levels above the world average, there are thirteen countries with actual individual consumption levels above the world average. The same is true of collective government consumption. The additional consumption levels come at the expense of gross fixed capital formation where only six countries have per capita levels above the world average.

PPP-based measures of collective government consumption

Collectivegovernment consumption expenditures consist of expenditures incurred by general and local governments for collective consumption services such as defense, justice, general administration,and the protection of the environment. Lower prices for such services in developing countries tend to reduce the dispersion of collective government consumption per capita across regions compared to that observed for per capita GDPs.

PPP-based measures of gross fixed capital formation

Gross fixed capital formation measures countries’ investment expenditures, which are mostly comprised of purchases of equipment and construction services.

Price level indexes

Aprice level index (PLI) is the ratio of a PPP to the market exchange rate of the numeraire currency. PLIs are used to compare price levels between countries. The PLI indicates the relative price of GDP (or its components) in a country, as if it were “purchased” after acquiring local currency at the prevailing exchange rate. PLIs are generally low in poorest countries. This reflects the common experience of travelers who find many (but not all) of the goods and services in the poorest countries relatively cheap compared to similar products in their home country.

Price levels generally rise with GDP per capita. In ECA Croatia has the highest price levels in the region and Tajikistan the lowest.