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The purchasing power standard (PPS) is the name given by Eurostat to the artificial currency unit in which the PPPs and real final expenditures for the EU 25 are expressed – namely, euros based on the EU 25.

Euros based on the EU 25 are euros that have the same purchasing power over the whole of the EU 25. Their purchasing power is a weighted average of the purchasing power of the national currencies of EU Member States. As such they reflect the average price level in the EU 25 or, more precisely, the weighted average of the price levels of Member States.

PPS are defined by equating the total real final expenditure of the EU 25 on a specific basic heading, aggregate or analytical category to the total nominal final expenditure of the EU 25 on the same basic heading, aggregate or analytical category.

Source Publication:
Eurostat, OECD, 2007, Eurostat-OECD Methodological Manual on Purchasing Power Parities, OECD, Paris – Annex VII, Glossary of terms and abbreviations.

Statistical Theme: Prices and purchasing power partities

Created on Thursday, July 12, 2007

Last updated on Thursday, July 26, 2007