(06 May 2014) – In 2011, the Gross Domestic Product (GDP) of the EU28 represented 18.6% of the world’s GDP. The United States was the second biggest economy with a share of 17.1% and China the third biggest with 14.9%. As for the cost of living, Switzerland was the world’s most expensive country.
These data were published by the Global Office of the International Comparison Program (ICP), hosted by the World Bank, and are the result of the 2011 round of the ICP. The ICP is a worldwide statistical partnership to collect comparative price data and compile detailed expenditure values of countries’ GDP, and to estimate purchasing power parities (PPPs) for the world’s economies.
Using PPPs instead of market exchange rates to convert currencies makes it possible to compare the output of economies and the material welfare of their inhabitants in real terms (that is, controlling for differences in price levels).
Price level indices (PLIs) show that the most expensive country in the world is Switzerland. Denmark has the highest PLIs among the EU Member States (5th world’s most expensive country). The difference between the highest and lowest PLIs in the world (found in Egypt) is about 6 times, whereas this gap within the EU-28 is about 3 times. Brazil’s PLIs are nearly twice as high as those of Bulgaria, the country with the lowest price levels in the EU.