Integration of Consumer Price Indices and the International Comparison Program for the Asia and Pacific Region: How Can They Be Achieved?

Abstract

The International Comparison Program (ICP) was established as a system for performing cross-country comparisons. Gross domestic product (GDP) and its components are converted into a single currency using purchasing power parities (PPP) thereby eliminating the shortcomings from using market exchange rates for establishing comparable levels of GDP across countries and estimating poverty based on internationally comparable poverty lines. The 2005 ICP for Asia and the Pacific has been hailed as a milestone in statistics with the participation of 23 economies in the Asia and Pacific region and the simultaneous participation of the People’s Republic of China and India, but concerns confronting past ICP activities still remain. This paper attempts to provide alternative ways to improve the operational aspects of ICP price collection on which to base future ICP data operations, and to do so without countries having to incur significant increases in regular budget outlays. Hence, the integration of consumer price index and ICP work is confined only to the household consumption aggregate of national accounts. Further, it explores how a more refined approach that modifies and expands existing procedures for price collection can be implemented, and how the ICP approaches can be integrated and sustained by countries even for nonbenchmark years.

Keywords: international comparison program, ICP, consumer price index, CPI, price, index, purchasing power parity, PPP, gross domestic product, GDP, national accounts, households