Despite a holiday debt crisis in the monetary union for U.S. citizens is relatively expensive: from purchasing power parity against the euro, the dollar is still far away. This shows a good comparison of fast-food prices.
By Barbara Schader Frankfurt
02.01.2012, 17:13
The euro crisis is entering its third year - yet the common currency against the dollar still overvalued.
This suggests at least the Big Mac Index: The burger costs in the euro area currently average the equivalent of $ 4.93, 21 percent more than in the U.S.. This means that purchasing power parity between the two currencies would be achieved only when the € depreciate from its current exchange rate of $ 1.29 would result in even more.
The wink-meaning index in 1986 by the British magazine "The Economist" was invented. Come despite the price differences in Big Macs, not only by the exchange rate into existence, the numbers a spotlight thrown on the curious consequences of the crisis: While the € said despite debt drama and impending recession in several countries of the monetary union fairly good was the zloty According to Big Mac index on Monday undervalued by 24 percent. This is the Polish economy as shiny: 2011 According to preliminary estimates, it grew by just over four percent, for the new year, the International Monetary Fund (IMF), an increase of 2.5 percent.
The Polish central bank intervened repeatedly in recent weeks, based on the currency markets to the Polish zloty. As the Turkish lira and the currencies of emerging economies in Asia and Latin America, the currency suffered as investors park their money in times of crisis, preferably in reserve currencies like the dollar. Even the euro rose against the zloty to eleven percent.
Despite the strong economic growth, many investors fear that Poland is drawn through the euro crisis hit. 54 percent of Polish exports go to the monetary union, moreover, the banks are mostly owned by western European parent companies.
For the government in Warsaw the slump is explosive because it threatened the observance of the national debt limit. The Treasury forecast in early December, 2011 the debt would rise to 53.7 percent of economic output - the legal limit is 55 percent. Nearly a third of the Polish government debt denominated in foreign currencies - whose value rises against the zloty, ie the growing mountain of debt.
At the same time a weak currency increases the inflationary pressure, because companies have to pay for imports from abroad more zloty. In November, consumer prices were according to the European statistics office Eurostat by 4.4 percent over the previous year.
Nevertheless, Big Macs cost the equivalent of $ 3.09 less in Poland than in any other major European countries except Russia. For the population is likely to be a small consolation, after all wages are also much lower than in most other European countries.
The "Economist" created therefore, besides the simple Big Mac index now once a year an additional special version, which takes into account the economic performance of each country. Result of the last update in July: In terms of gross domestic product per head was then under-the zloty against the dollar but not overstated. This was especially true for the euro, the end of July still listed at $ 1.43. In this respect, a correction was probably due - at least it benefits the exporters in Europe.
By Barbara Schader Frankfurt
02.01.2012, 17:13
The euro crisis is entering its third year - yet the common currency against the dollar still overvalued.
This suggests at least the Big Mac Index: The burger costs in the euro area currently average the equivalent of $ 4.93, 21 percent more than in the U.S.. This means that purchasing power parity between the two currencies would be achieved only when the € depreciate from its current exchange rate of $ 1.29 would result in even more.
The wink-meaning index in 1986 by the British magazine "The Economist" was invented. Come despite the price differences in Big Macs, not only by the exchange rate into existence, the numbers a spotlight thrown on the curious consequences of the crisis: While the € said despite debt drama and impending recession in several countries of the monetary union fairly good was the zloty According to Big Mac index on Monday undervalued by 24 percent. This is the Polish economy as shiny: 2011 According to preliminary estimates, it grew by just over four percent, for the new year, the International Monetary Fund (IMF), an increase of 2.5 percent.
The Polish central bank intervened repeatedly in recent weeks, based on the currency markets to the Polish zloty. As the Turkish lira and the currencies of emerging economies in Asia and Latin America, the currency suffered as investors park their money in times of crisis, preferably in reserve currencies like the dollar. Even the euro rose against the zloty to eleven percent.
Despite the strong economic growth, many investors fear that Poland is drawn through the euro crisis hit. 54 percent of Polish exports go to the monetary union, moreover, the banks are mostly owned by western European parent companies.
For the government in Warsaw the slump is explosive because it threatened the observance of the national debt limit. The Treasury forecast in early December, 2011 the debt would rise to 53.7 percent of economic output - the legal limit is 55 percent. Nearly a third of the Polish government debt denominated in foreign currencies - whose value rises against the zloty, ie the growing mountain of debt.
At the same time a weak currency increases the inflationary pressure, because companies have to pay for imports from abroad more zloty. In November, consumer prices were according to the European statistics office Eurostat by 4.4 percent over the previous year.
Nevertheless, Big Macs cost the equivalent of $ 3.09 less in Poland than in any other major European countries except Russia. For the population is likely to be a small consolation, after all wages are also much lower than in most other European countries.
The "Economist" created therefore, besides the simple Big Mac index now once a year an additional special version, which takes into account the economic performance of each country. Result of the last update in July: In terms of gross domestic product per head was then under-the zloty against the dollar but not overstated. This was especially true for the euro, the end of July still listed at $ 1.43. In this respect, a correction was probably due - at least it benefits the exporters in Europe.