Purchasing Power Parity compares price levels across countries to convert values in a way that reflects local purchasing power rather than market exchange rates.

Which method should I use?

If you have PPP conversion factors (LCU per international dollar), use the Conversion Factors method. If you only have CPI/price indices and a nominal FX rate, use the Price Indices + FX method to get a PPP-implied exchange rate.

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PPP Calculator — Purchasing Power Parity Converter

Private & instant. Convert between countries using PPP conversion factors or CPI + FX. No uploads.

Options

Source symbol (optional) Shown before numbers for the source amount.

Target symbol (optional) Shown before numbers for the result.

Decimal places Affects the formatted outputs only.

Method

Tip If you have PPP conversion factors (LCU per international $) for both countries, use Conversion Factors. Otherwise use Price Indices + a nominal FX rate to infer a PPP-adjusted rate.

Conversion Factors (LCU per International $)

If CF_A and CF_B are PPP conversion factors (LCU per international $) for countries A and B:
Amount_B = Amount_A × (CF_B / CF_A)

Amount in Country A (LCU_A)

CF_A (LCU_A per Int$)

CF_B (LCU_B per Int$)

Label (optional)

Example fills illustrative numbers (not real data).

Results

Use consistent vintages/sources for factors or indices. PPP is for price-level comparison, not a forecast of market FX.

PPP: Frequently Asked Questions

What are PPP conversion factors?

They express local currency units (LCU) per international dollar. If CF_A is lower than CF_B, A is relatively more expensive (higher price level) than B, all else equal.

What does “Price Indices + FX” do?

It scales the nominal FX rate by the ratio of price indices (same base) to infer a PPP-consistent exchange rate. Then it converts your amount with that PPP rate.

Can I mix data sources?

You can, but mixing vintages may create inconsistencies. Prefer matched years/quarters and the same provider definitions.

Privacy

All calculations run locally in your browser; nothing leaves your device.

What Is Purchasing Power Parity (PPP)?

Purchasing Power Parity (PPP) is a way to compare the price level of two economies so that money amounts reflect what people can actually buy locally, not just how currencies trade on foreign exchange markets. Market exchange rates are influenced by capital flows, risk sentiment, and policy; PPP instead focuses on relative prices of a common basket of goods and services. When you convert an amount using PPP, you are answering the question: “How much would I need in Country B to enjoy the same purchasing power as Amount A buys in Country A?”

Two common ways to compute PPP-adjusted values

1) Conversion factors (LCU per international dollar). Many statistical agencies publish a PPP conversion factor that tells you how many local currency units (LCU) equal one “international dollar,” a hypothetical unit with the same purchasing power as a U.S. dollar in the base year. If CF_A and CF_B are the factors for countries A and B, the PPP-equivalent of an amount in A into B is:

Amount_B = Amount_A × (CF_B / CF_A)

2) Price indices + nominal exchange rate. If you know a nominal FX rate E (LCU_A per 1 LCU_B) and comparable price indices (e.g., CPI) with the same base, you can form a PPP-implied exchange rate:

E_PPP = E × (CPI_A / CPI_B) and Amount_B = Amount_A / E_PPP

Absolute vs. Relative PPP

Absolute PPP compares price levels at a point in time (via conversion factors). Relative PPP compares rates of inflation over time and predicts that exchange rates tend to move in line with inflation differentials. This calculator focuses on absolute comparisons (and a simple relative approach via indices) to make results intuitive and transparent.

When PPP is useful (and when it isn’t)

Useful: comparing wages, salaries, rents, or budgets across countries; valuing projects with local cost structures; benchmarking living standards or price levels; communicating affordability to non-specialists.
Less useful: short-term trading or precise forecasting of market exchange rates; valuation problems where cross-border prices are not comparable (e.g., luxury goods with global pricing or non-tradable services with quality differences).

Data quality and consistency

PPP is only as good as the inputs. Prefer matched years and a single source for both countries (e.g., national statistics offices, international agencies). Make sure your CPI series share the same base year (such as 2020=100). Mixing vintages or definitions can create artificial gaps. If your figures seem “off,” double-check whether you entered LCU per international dollar (not the other way around), and confirm that the FX rate direction matches the labels in this tool.

How to use this tool

Pick a method: Use Conversion Factors if you have LCU per international dollar for both countries; otherwise use Price Indices + FX.
Enter the source amount (in Country A’s local currency) and any optional currency symbols for clearer output.
Provide factors/indices from the same year or quarter for both countries.
Review the result as the PPP-equivalent in Country B. This reflects comparable purchasing power, not a prediction of the market exchange rate.

Interpretation tips

If the PPP-equivalent is higher than an FX conversion, Country B is relatively more expensive for that basket; if it’s lower, B is relatively cheaper. Treat PPP as a powerful lens for affordability and cross-country comparison—best used alongside, not instead of, market rates and local context.