PPP adjustment in GDP

Purchasing Power Parity (PPP) adjustment in GDP is a method that compares the economic output of different countries by accounting for differences in price levels. Instead of just converting currencies at current exchange rates, PPP adjusts for how much goods and services actually cost in each country. This helps provide a more accurate comparison of living standards and economic size, showing what people can buy with their income locally. Essentially, PPP gives a clearer picture of how much people in different countries can afford, making cross-country economic comparisons fairer and more meaningful.