Unveiling the Low Value of the Hungarian Forint: Big Mac Index Reveals Price Disparities
The latest Big Mac Index from The Economist has revealed that Switzerland and Norway remain the most expensive countries in the world when it comes to the price of a Big Mac. In these European nations, a Big Mac costs EUR 6.71 and 6.26, respectively. On the other end of the spectrum, Hungary ranks at the bottom of the list, with an average price of just EUR 2.65 for the same sandwich.
The Big Mac Index was introduced by The Economist in 1986 as a fun way to measure purchasing power parity across countries. Over the years, it has become a widely recognised global economic indicator. The index compares the price of Big Macs in different countries to the price in the United States, providing valuable insights into economic conditions and consumer purchasing power worldwide.
In the United States, a Big Mac typically costs around EUR 5.15, with prices varying by region. Switzerland tops the list with a price of EUR 6.71, followed by Norway, Uruguay, Sweden, and Canada. These countries have local average prices higher than those in the U.S. Factors such as labor costs, purchasing power, and taxes contribute to these price differences.
Conversely, countries like Lebanon, Israel, and the United Arab Emirates have slightly lower Big Mac prices compared to the U.S. In Lebanon, a Big Mac costs EUR 5.08. At the bottom of the list, countries such as Turkey, Hungary, and Taiwan have some of the lowest Big Mac prices.
The Big Mac Index also reveals the extent to which national currencies are either undervalued or overvalued relative to the U.S. dollar. For example, the Uruguayan peso is overvalued by 51.8%, while Taiwan’s dollar is undervalued by 59.3%. Other significantly overvalued currencies include the Argentine peso, the Swiss franc, the Norwegian krone, the Costa Rican colón, the euro, and the British pound.
In contrast, the Hungarian forint is undervalued by 20.3% according to the Big Mac Index. These price disparities and currency valuation insights shed light on the varying economic conditions across the globe.
