3 - 9 May 2001

Price of Big Mac in Malta among most expensive

by David Kelleher

We are now more than aware that we are living beyond our means. The governor of the Central Bank made it very clear a few months ago. What is also very clear is that we are also having to pay much more than we should for a range of items.
The Economist’s annual Big Mac index of currencies gives a good indication of how various currencies tend to move. Although it is not a precise indicator it does, as The Economist put it, “make the exchange rate theory a bit more digestible”.
In this year’s index, the Maltese lira is not included however The Malta Business Weekly felt the need to see how we compare with other countries when it comes to buying a juicy Big Mac.
Not surprisingly, we fare quite badly. In fact the price of a Big Mac in Malta is among the most expensive in the world. According to The Economist, the most expensive hamburgers are found in Britain ($2.85), Denmark ($2.93) and Switzerland ($3.65). The cheapest are found in China, Malaysia, the Philippines and South Africa at $1.20, $1.19, $1.17 and $1.19 respectively.
The prices are calculated by taking the price of a standard Big Mac in the United States and comparing this price with those in other countries after converting the local currency into dollars.
In Malta, the price of a Big Mac is Lm1.15. Using the same rate of exchange as at 17 April 2001, the price in dollars is $2.547. This is the same price as a burger in the United States. The only difference is that per capita income in the US, on average, is more than double that in Malta. The same applies for many other countries whose per capita income is much higher than Malta’s.
Comparing the price of a Big Mac to other countries, Malta is the fourth most expensive according to The Economist’s list, more expensive than in France ($2.49), Italy ($1.96), Spain ($2.09) and Germany ($2.30). With regards to the other applicant countries for EU membership, Malta remains the most expensive place to buy a Big Mac. In Poland a Big Mac costs $1.46, Czech Rep, $1.43 and Hungary, $1.42.
So if you really want a reasonably priced Big Mac you’re better off going to France, Germany or Italy where the price is certainly more digestible. While the Big Mac index should not be considered an economist’s bible, it does give an indication that Malta’s cost-of-living is on the high side compared to the average per capita income.