How much does a Big Mac cost in Arab countries? 

How much does a Big Mac cost in Arab countries? 
The Economist invented the index to offer a lighthearted measure of currency valuation by applying the economic theory of PPP. Shutterstock
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Updated 01 October 2024
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How much does a Big Mac cost in Arab countries? 

How much does a Big Mac cost in Arab countries? 
  • Big Mac Index reveals currency undervaluation across the region 
  • Cheapest Big Mac was in Egypt, priced at $2.47, and most expensive was in Lebanon, costing $5.13

CAIRO: A Big Mac burger costs less on average in Arab countries compared to the US, indicating currency undervaluation in the region.

The latest Big Mac Index reveals that currencies in Saudi Arabia, Egypt, Bahrain, UAE, Lebanon, Jordan, Qatar, Oman, and Kuwait are undervalued when compared to the US dollar, indicating disparities in purchasing power parity across these nations. 

The cheapest Big Mac was in Egypt, priced at 120 Egyptian pounds ($2.47), reflecting a 56.6 percent undervaluation of the Egyptian pound against the US dollar. 

Conversely, the most expensive Big Mac was in Lebanon, costing 460,000 Lebanese pounds ($5.13), indicating a 9.7 percent undervaluation of the Lebanese pound. 

Invented by The Economist in 1986, the index offers a lighthearted measure of currency valuation by applying the economic theory of PPP. This theory suggests that exchange rates should adjust so that a basket of goods and services, including a Big Mac burger, costs the same across different countries when measured in a common currency. 

Most other Arab currencies, including the Kuwaiti dinar, Bahraini dinar, and Omani rial, also showed notable undervaluation in July, highlighting ongoing regional economic imbalances.

Here’s how each country fares in currency valuation and purchasing power:

Saudi Arabia  

The Big Mac Index for July reveals that the Saudi riyal is 11 percent undervalued against the US dollar, with a Big Mac costing SR19 ($5.06) compared to $5.69 in the US. 

The implied exchange rate of SR3.34 per dollar contrasts with the actual market rate of SR3.75, underscoring the currency’s undervaluation. However, after adjusting for gross domestic product per capita, the analysis shows that a Big Mac is 11 percent cheaper in Saudi Arabia, while it should be 12.6 percent cheaper. This suggests the riyal is actually 1.8 percent overvalued when considering local purchasing power. 

This represents a slight shift from July 2023, when the riyal was 9.2 percent undervalued based on the Big Mac Index.  

At that time, a Big Mac in Saudi Arabia also cost SR19, compared to $5.58 in the US, resulting in an implied exchange rate of 3.41. Adjusting for GDP per capita, the 2023 analysis indicated that a Big Mac was 9.2 percent cheaper in Saudi Arabia, but it should have been 11 percent cheaper, suggesting the riyal was 2 percent overvalued. 

This year’s Big Mac Index highlights significant undervaluation across several Arab currencies, continuing a trend observed in the previous year and underscoring ongoing disparities in purchasing power within the region. 

UAE  

In the UAE, a Big Mac cost 18 dirhams in July, implying an exchange rate of 3.16 UAE dirhams per US dollar. However, the actual exchange rate was 3.67 dirhams per dollar, indicating that the dirham was 13.9 percent undervalued. 

When adjusted for GDP per capita, the dirham was still undervalued by 8.4 percent, as a Big Mac cost 11 percent less in the UAE compared to the US. 

This represents a slight increase from July 2023, when the dirham was 12.2 percent undervalued with an implied exchange rate of 3.23 dirhams per dollar. At that time, the GDP-adjusted analysis showed the dirham was 7.7 percent undervalued, with the Big Mac priced 12.2 percent less in the UAE. 

Bahrain  

In Bahrain, a Big Mac was priced at 1.70 dinars in July, implying an exchange rate of 0.30 dinars per US dollar. The actual exchange rate was 0.38 dinars per dollar, indicating a 20.8 percent undervaluation of the Bahraini dinar. 

When adjusted for GDP per capita, the dinar remained undervalued by 9 percent, with the Big Mac costing 20.8 percent less than in the US. 

This marks a slight increase in undervaluation from July 2023, when the dinar was 19.2 percent undervalued with an implied exchange rate of 0.30 dinars per dollar. At that time, the GDP-adjusted undervaluation was 8.4 percent, with the Big Mac priced 19.2 percent less than in the US. 

Kuwait   

In Kuwait, a Big Mac was priced at 1.40 dinars in July, implying an exchange rate of 0.25 dinars per US dollar. The actual exchange rate was 0.31 dinars per dollar, suggesting the Kuwaiti dinar was 19.5 percent undervalued. 

When adjusted for GDP per capita, the dinar was 9.1 percent undervalued, with the Big Mac costing 19.5 percent less than in the US. 

In comparison, July 2023 data indicated the dinar was 18.3 percent undervalued, with an implied exchange rate of 0.25 dinars per dollar. The GDP-adjusted analysis at that time showed the dinar was 10.4 percent undervalued, with the Big Mac priced 18.3 percent less in Kuwait. 

Oman   

Oman displayed the highest level of undervaluation in July, with a Big Mac priced at 1.53 rials, implying an exchange rate of 0.27 rials per US dollar. The actual exchange rate was 0.39 rials per dollar, indicating a 30.2 percent undervaluation of the Omani rial. 

When adjusted for GDP per capita, the rial was 18.6 percent undervalued, with the Big Mac costing 30.2 percent less in Oman compared to the US. 

This represents a slight improvement from July 2023, when the rial was 33.9 percent undervalued, with an implied exchange rate of 0.25 rials per dollar. The GDP-adjusted analysis from that year showed the rial was 25.1 percent undervalued, with the Big Mac priced 33.9 percent less in Oman. 

Egypt  

In Egypt, a Big Mac was priced at 120 Egyptian pounds in July, implying an exchange rate of 21.09 pounds per US dollar. The actual exchange rate was 48.60 pounds per dollar, indicating a 56.6 percent undervaluation of the Egyptian pound. 

When adjusted for GDP per capita, the pound was 44.7 percent undervalued, with the Big Mac costing 56.6 percent less in Egypt compared to the US. 

This marks a deterioration from July 2023, when the pound was 53.1 percent undervalued, with an implied exchange rate of 14.52 pounds per dollar. At that time, the GDP-adjusted analysis showed the pound was 41.1 percent undervalued, with the Big Mac priced 53.1 percent less in Egypt. 

Qatar  

In July, the Qatari riyal displayed notable undervaluation, with a Big Mac priced at 14 riyals, implying an exchange rate of 2.46 riyals per US dollar. The actual rate was 3.64 riyals per dollar, indicating a 32.4 percent undervaluation of the riyal. 

After adjusting for GDP per capita, the riyal was 38.4 percent undervalued, with the Big Mac costing 32.4 percent less in Qatar compared to the US. 

This reflects a slight increase from July 2023, when the riyal was 31.1 percent undervalued, with an implied exchange rate of 2.51 riyals per dollar. The GDP-adjusted analysis from that year suggested the riyal was 38 percent undervalued, with the Big Mac priced 31.1 percent less in Qatar. 

Jordan  

In Jordan, the Big Mac was priced at 2.50 dinars in July, implying an exchange rate of 0.44 dinars per US dollar compared to the actual rate of 0.71 dinars. This indicates the Jordanian dinar was 38 percent undervalued. 

After adjusting for GDP, the dinar was 21.8 percent undervalued, with the Big Mac costing 38 percent less in Jordan than in the US. 

This marks a slight increase in undervaluation from July 2023, when the dinar was 36.8 percent undervalued, with an implied exchange rate of 0.45 dinars per dollar. The GDP-adjusted analysis at that time showed the dinar was 21.2 percent undervalued, with the Big Mac priced 36.8 percent less in Jordan. 

Lebanon  

In July, a Big Mac in Lebanon was priced at 460,000 Lebanese pounds, implying an exchange rate of 80,843.59 pounds per US dollar compared to the actual rate of 89,550.00 pounds. This indicates the Lebanese pound was 9.7 percent undervalued. 

In July 2023, the Big Mac cost 430,000 Lebanese pounds, with an implied exchange rate of 77,060.93 pounds per dollar. The actual rate at that time was 85,500 pounds, suggesting the pound was 9.9 percent undervalued. 

These figures highlight a persistent undervaluation of the Lebanese pound and other Arab currencies, with consistent disparities between implied and actual exchange rates. Despite slight year-over-year variations, the trend of undervaluation remains stable, reflecting ongoing challenges in currency valuation in the region.


IMF warns of economic slowdown, but rules out global recession

IMF warns of economic slowdown, but rules out global recession
Updated 17 April 2025
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IMF warns of economic slowdown, but rules out global recession

IMF warns of economic slowdown, but rules out global recession

WASHINGTON: Rising trade tensions and sweeping shifts in the global trading system will trigger downward revisions of the IMF’s economic forecasts but no global recession is expected, the lender’s managing director said on Thursday.

Kristalina Georgieva said countries’ economies were being tested by a reboot of the global trading system — sparked in recent months by US tariffs and retaliation by China and the EU — that had unleashed “off the charts” uncertainty in trade policy and extreme volatility in financial markets.

“Disruptions entail costs ... our new growth projections will include notable markdowns but not recession,” she said in prepared remarks, adding the outlook would also include higher inflation forecasts for some countries.

“To quote from the ‘Wizard of Oz,’ we’re not in Kansas anymore,” Georgieva told IMF staff and reporters at the IMF headquarters in Washington ahead of the spring meetings of the IMF and World Bank next week.

Elevated uncertainty also raised the risk of financial market stress, Georgieva said, noting that recent movements in US Treasury yield curves should be taken as a warning. “Everyone suffers if financial conditions worsen,” she said.

US President Donald Trump has upended the global trading system with a tsunami of new tariffs, including a 10 percent US duty on goods from all countries and higher rates for some, although those have been paused for 90 days to allow negotiations. China, the EU and other countries have announced retaliatory measures.

The IIMF in January forecast global growth of 3.3 percent in 2025 and 3.3 percent in 2026. It will release an updated World Economic Outlook on Tuesday.

Georgieva, speaking at IMF headquarters in Washington ahead of the spring meetings of the IMF and World Bank next week, gave no details about the expected revisions, but warned that prolonged uncertainty would be costly and said the consequences of the trade reboot would be “significant.”

Georgieva said trade tensions had been bubbling for some time, but were now boiling over, and urged countries to respond wisely to the “sudden and sweeping shifts” seen in tariffs, driving the US effective tariff rate to levels last seen several lifetimes ago and resulting in response by other countries.

“As the giants face off, smaller countries are caught in the cross currents,” Georgieva said. China, the EU and the US were the world’s three largest importers, which meant big spillovers for smaller countries that were more exposed to tighter financial conditions, she said.

Rising tariffs hit growth upfront, she said, noting that past evidence showed that higher tariff rates were paid by importers through lower profits and consumers through higher costs.

In big economies, they could also create incentives for new inward investment, creating new jobs, but this took time.

“Protectionism erodes productivity over the long run, especially in smaller economies,” she said, warning that moves to shield industry from competition also undercut entrepreneurship and hurt innovation.

Georgieva urge countries to continue economic and financial reforms while maintaining agile and credible monetary policy, as well as strong financial market regulation and supervision.

Emerging market economies should preserve their exchange rate flexibility, and donor countries should better protect aid flows to vulnerable low-income countries, she added.

Georgieva also called for cooperation in an increasingly multi-polar world, and urged the largest economies to reach a trade settlement that preserved openness and restarted a global trend toward lower tariff rates and reduced non-tariff barriers.

“We need a more resilient world economy, not a drift to division,” she said. “All countries, large and small alike, can and should play their part to strengthen the global economy in an era of more frequent and severe shocks.”


Libyans grapple with fresh currency devaluation

Libyans grapple with fresh currency devaluation
Updated 17 April 2025
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Libyans grapple with fresh currency devaluation

Libyans grapple with fresh currency devaluation
  • Libyans are facing a sharp deterioration in their purchasing power after a sudden devaluation of the Libyan dinar
  • Libya has Africa’s most abundant hydrocarbon reserves, but it is struggling to recover from years of conflict since 2011

TRIPOLI: Already worn down by years of political turmoil and economic hardships, Libyans are now facing a sharp deterioration in their purchasing power after a sudden devaluation of the Libyan dinar.
Experts have said the national currency’s exchange rate decline came as a consequence of ballooning public expenditures by the country’s rival governments in recent years.
Libya has Africa’s most abundant hydrocarbon reserves, but it is struggling to recover from years of conflict after the 2011 NATO-backed uprising that overthrew longtime dictator Muammar Qaddafi.
It is currently divided between a UN-recognized government in the capital Tripoli and a rival administration in the east backed by general Khalifa Haftar, with the division exacerbating the country’s economic woes.
The Libyan central bank earlier this month devalued the dinar by 13.3 percent, the second such move in five years.
The exchange rate went up to 5.56 dinars to the US dollar from 4.48 — while on the black market it jumped to 7.80 dinars to the US dollar from 6.90.

It has become hard to keep up with our needs for food, medicine, transportation, education and bills

Karim Achraf, Libyan engineer

The impact was immediate, with small business owners and wholesale traders, who rely heavily on the parallel market to obtain foreign currency for imports, seeing their costs surge.
“The currency keeps going down,” said Karim Achraf, a 27-year-old engineer and father of three living in the capital, Tripoli.
“It has become hard to keep up with our needs for food, medicine, transportation, education and bills,” he said.
“We can’t trust our governments with our economy and safety.”
Political deadlock
Despite its vast oil reserves, output remains below pre-2011 levels and the country lacks a robust industrial and agricultural sector.
It is almost entirely dependent on imported food, medical supplies and consumer goods, with oil exports its main source of revenue.
The United Nations Support Mission in Libya (UNSMIL) has expressed alarm following the sudden devaluation, urging both administrations to take “urgent measures to stabilize the national economy.”
“Swift action is essential to reduce the negative impact on the Libyan people, including rising costs of living, declining purchasing power and the erosion of public trust in state institutions and leaders,” it said in a statement.
In Tripoli, dozens of protesters recently gathered outside the central bank headquarters to voice their anger.

Libya's central bank was forced to make the decision to protect what remained of the dinar’s strength

Mahmoud El-Tijani, an economist

But while much of the criticism has been aimed at the bank, some believe it is unfairly blamed for problems stemming from political deadlock and fiscal mismanagement.
Mahmoud El-Tijani, a Libyan economist, said the central bank was “a victim of the executive branch’s failure and division.”
He said it was “forced to make the decision to protect what remained of the dinar’s strength.”
Amid falling oil revenues, the devaluation of the dinar was used as a “last-chance measure to avoid bankruptcy and external debt,” he added.
Libya’s institutions, including its central bank, have for a decade found themselves caught between the rival governments.
Until 2023, the bank was split in two, with an internationally recognized headquarters in the capital and another in the east, with each printing bills signed off by their respective governors.
Last year, the then-governor of the bank fled amid violent tensions surrounding the institution, with the United Nations stepping in to broker a deal for a new governor to be appointed.
Central bank
Jalel Harchaoui, a senior fellow at the London-based Royal United Services Institute, said the central bank was “simply confronting the inevitable consequences of the political choices made by Libya’s ruling factions.”
“These enormous expenditures are highly political, arbitrary, and unsustainable,” he said.
“They are not decided by the central bank, which is a technocratic institution without the military or sociopolitical clout of Libya’s leaders.”
“Blaming the central bank is pure populism,” Harchaoui added, describing the bank as “a scapegoat.”
Anwar Al-Turki, a banker in Tripoli, said the central bank was being “mistreated” by political leaders who had authorized “the highest public spending in modern Libyan history.”
He said the decision makers had little regard for “good governance, financial compliance, or anti-corruption.”


Closing Bell: Saudi main index closes in red at 11,502

Closing Bell: Saudi main index closes in red at 11,502
Updated 17 April 2025
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Closing Bell: Saudi main index closes in red at 11,502

Closing Bell: Saudi main index closes in red at 11,502

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Thursday, losing 81.44 points, or 0.7 percent, to close at 11,552.98.

The total trading turnover of the benchmark index was SR4.72 billion ($1.25 billion), as 44 stocks advanced, while only 202 retreated.

The MSCI Tadawul Index decreased by 10.51 points, or 0.71 percent, to close at 1,469.39.

The Kingdom’s parallel market, Nomu, dipped, losing 369.85 points, or 1.27 percent, to close at 28,713.72. This comes as 29 stocks advanced while 60 retreated.

This aligns with a dip in global stock markets with the ongoing worldwide trade war following US President Donald Trump’s reciprocal tariffs introduced earlier this month.

For instance, the Nasdaq index dipped 3.07 percent in the trading session on April 16, closing at 16,307.16, losing 516.01 points.

The best-performing stock was Alistithmar AREIC Diversified REIT Fund with its share price surging by 10 percent to SR6.60.

Other top performers included Dar Alarkan Real Estate Development Co., which saw its share price rise by 3.82 percent to SR22.84, and Allied Cooperative Insurance Group, which saw a 3.44 percent increase to SR16.22.

Al Mawarid Manpower Co. and Jabal Omar Development Co. also saw increases in today’s trading session, with their share prices advancing by 2.10 percent and 1.82 percent to SR145.60 and SR23.52, respectively.

The day’s worst performer was Al-Baha Investment and Development Co., whose share price fell 5.74 percent to SR3.12.

Middle East Specialized Cables Co. and Lazurde Co. for Jewelry also saw declines, with their shares dropping by 4.83 percent each to SR35.50 and SR13.40, respectively.

The top four and five worst performers were Raoom Trading Co. and Saudi Printing and Packaging Co., whose share prices dipped by 4.48 percent and 4.36 percent to SR78.90 and SR10.52, respectively.


Red Sea tensions slash Suez Canal revenue as Egypt pushes diplomatic path

Red Sea tensions slash Suez Canal revenue as Egypt pushes diplomatic path
Updated 17 April 2025
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Red Sea tensions slash Suez Canal revenue as Egypt pushes diplomatic path

Red Sea tensions slash Suez Canal revenue as Egypt pushes diplomatic path

JEDDAH: Amid escalating tensions in the Red Sea, Egypt’s Prime Minister Mostafa Madbouly reaffirmed the country’s commitment to diplomatic solutions as disruptions to international shipping through the Suez Canal led to a dip in revenues.

Speaking at a high-level ceremony on April 16 celebrating the Suez Canal Authority’s Day of Excellence, Madbouly warned that regional instability has already had a significant impact on global trade, with Suez Canal revenues falling to $3.99 billion in 2024 — a stark drop from the record $10.25 billion recorded in 2023.

The decline follows a wave of attacks by Yemen’s Houthis on commercial shipping in the Red Sea, part of the group’s protest against the Gaza conflict. Between November 2023 and January 2024, they targeted over 100 merchant vessels.

Despite these challenges, Madbouly emphasized Egypt’s role as a stabilizing force, asserting that Cairo has deliberately avoided any actions that might undermine regional security. “Egypt has opted for a path of political solutions, working with international partners to address the crisis while ensuring the continued functioning of the canal,” he said in a statement.

The prime minister described the canal as “the heart of global trade,” underlining its historic and strategic value not only to Egypt but to international commerce.

He credited President Abdel Fattah El-Sisi’s leadership for ongoing development efforts, including modernizing the canal’s infrastructure and services.

The Suez Canal Authority also unveiled several new initiatives during the ceremony, including a ship waste management service in partnership with V Group, which aims to position the canal as a certified green route by 2030. Additional projects launched included the region’s first floating pontoon factory and the Suez Canal Innovation and Excellence Center.

In a show of international cooperation, Madbouly witnessed the signing of a memorandum of understanding with Spain’s Tejedor Lazaro Group to advance aquaculture and fish feed production — a move aligned with Egypt’s broader food security and investment strategy.

SCA Chairman Osama Rabie thanked the government for its backing and pointed to signs of recovery. He said 264 vessels had returned to transiting the canal instead of rerouting around the Cape of Good Hope since February, attributing this shift to adaptive marketing strategies and client engagement.

March 2025 brought modest gains: vessel transits rose by 2.4 percent, net tonnage increased by 7.1 percent, and revenue grew by 8.8 percent compared to January.

Despite headwinds including the COVID-19 pandemic and regional conflicts, Rabie highlighted the canal’s resilience. From 2019 to 2024, more than 121,000 ships passed through the waterway, carrying over 7.1 billion tons of cargo and generating nearly $40 billion in revenue.

The Day of Excellence event was attended by several ministers, foreign ambassadors, and maritime officials, underscoring the canal’s global relevance.


Pakistan external account posts record monthly surplus, buoying investor confidence

Pakistan external account posts record monthly surplus, buoying investor confidence
Updated 17 April 2025
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Pakistan external account posts record monthly surplus, buoying investor confidence

Pakistan external account posts record monthly surplus, buoying investor confidence
  • Current account posts a record and one of the highest monthly surpluses in March 2025 with $1.19 billion, up 229% year-on-year
  • Pakistan stocks concluded Thursday’s session on bullish note, with KSE-100 Index advancing by 881 points to close at 116,901 level

KARACHI: The State Bank of Pakistan said on Thursday the country’s current account, which comprises external trade and transfers, had posted a record and one of the highest monthly surpluses in March 2025 with $1.19 billion, up 229% year-on-year.
The Pakistan Stock Exchange also concluded Thursday’s session on a bullish note, with the KSE-100 Index advancing by 881 points, or 0.76%, to close at 116,901 level. 
“Investor sentiment was buoyed by record-high remittances, which contributed to a historic current account surplus in March 2025. The surplus for the first nine months of FY25 reached $1.9 billion,” Topline securities said in a statement. 
The surplus in March 2024 stood at $363 million, the latest central bank data showed. 
On Monday, Central Bank governor Jameel Ahmad had said the current account would show a “substantial” surplus this year through June mainly on the back of a record inflow of remittances which crossed the $4 billion mark in March, with Saudi Arabia once again topping the list of biggest contributors.
“With record monthly surplus in March 2025, cumulative surplus in country’s Current Account for 9MFY25 (Jul-Mar25) now stands at $1.86 billion, which was in a deficit of $1.65 billion in the same period last year,” SBP said. 
In March 2025, Pakistan’s exports recorded at $3.51 billion, growing 8.7% YoY and 6.0% MoM. Imports also rose 8.0% YoY to $5.92 billion in March but fell 1.9% MoM.
“Resultantly, while Trade Deficit (Goods+Services) went up 7% YoY, it narrowed 11.5% MoM in March 2025,” the data showed. 
For 9MFY25 (Jul-Mar25), total exports now stand at $30.9 billion, up 8.1% YoY, while total imports stand at $51.9 billion, up 10.7% YoY, with the cumulative trade deficit at $21.1 billion, up 14.7% YoY. 
“With oil prices down, and remittances continuing to make a record mark, Pakistan’s current account is expected to be in deep surplus by June FY25 and may also continue in FY26, thereby resulting in further scale-up in overall investor confidence,” the central bank said. 
Pakistan received a record-high $4.1 billion in remittances in March 2025, which bodes well for the government’s efforts to revive an economy that it expects will expand three percent this year, SBP governor Ahmad said at an event at the Pakistan Stock Exchange in Karachi on Monday.
The central bank had earlier projected economic growth to range from 2.5% to 3.5%.
“With this level of remittances, we are hoping that for the current fiscal year our current account will stay in surplus,” the governor said. “There will be a substantial surplus and this surplus is the best performance, I will say, on the external account during the last two decades.”
The country broke its own record in February when overseas Pakistanis remitted $3.1 billion.