Big Mac Index Case Studies

The Big Mac Index is a powerful lens through which we can observe currency misalignments and assess the real-world implications of economic policy. While the index is often used for broad comparisons, diving deeper into individual countries offers rich insights into how currency valuation, monetary policy, and local economic conditions interact.

In this article, we’ll examine two prominent case studies from the 2025 Big Mac Index dataset: Switzerland, a historically overvalued currency, and Egypt, one of the most undervalued.

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Case Study 1: Switzerland — The Persistent Overvaluation

Switzerland has consistently topped the Big Mac Index charts as one of the most overvalued currencies. In 2025, a Swiss Big Mac costs the equivalent of $8.27**, compared to **$5.69 in the United States—indicating a currency overvaluation of over 45% relative to purchasing power parity.

Why Is the Swiss Franc So Strong?

• Safe Haven Status: The Swiss Franc (CHF) is viewed globally as a stable, low-risk currency, often attracting capital during geopolitical or market uncertainty.
• Low Inflation and Fiscal Discipline: Switzerland’s reputation for low inflation, high productivity, and political stability enhances confidence in the CHF.
• Currency Intervention: Despite the Swiss National Bank’s (SNB) past interventions to weaken the Franc, especially around the 2015 removal of the EUR/CHF cap, the currency remains strong.

Economic Implications

• Exports and Tourism: A strong franc makes Swiss goods and services more expensive abroad, hurting exports and tourism competitiveness.
• Domestic Consumption: Swiss consumers benefit from strong purchasing power when traveling or shopping online.
• Policy Response: The SNB continues to monitor currency appreciation, occasionally intervening via bond purchases or negative interest rates to deter capital inflows.

This case shows how a fundamentally sound economy with high global trust can still suffer from currency misalignments that challenge competitiveness.

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Case Study 2: Egypt — Undervaluation Amid Reform

Egypt ranks among the countries with the most undervalued currencies in the 2025 Big Mac Index. A Big Mac in Cairo costs approximately $2.23 when converted to USD—suggesting the Egyptian Pound is undervalued by over 60%.

What’s Driving This Undervaluation?

• Currency Devaluation: Egypt undertook a series of sharp currency devaluations, particularly since 2016 and again in 2022–2023, as part of IMF reform agreements.
• High Inflation and Subsidies: While reforms targeted subsidy cuts and fiscal consolidation, inflation has remained stubbornly high, eroding real incomes.
• Parallel Markets: Due to import restrictions and limited FX reserves, unofficial exchange rates often differ significantly from the official peg.

Economic Implications

• Investment Magnet or Risk?: Low currency valuation can attract foreign investors looking for undervalued assets—but may also deter due to economic instability.
• Import Pain: A weak pound increases the cost of imported goods, worsening inflation for local consumers.
• Policy Trade-offs: Egypt continues to balance between stabilizing its currency and fulfilling reform demands from international lenders.

Egypt’s case illustrates how PPP indicators like the Big Mac Index highlight the real-world struggles of balancing reform, inflation, and currency stability.

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Lessons from the Index

These contrasting case studies reveal broader themes:

Feature	Switzerland	Egypt
Big Mac Price (USD)	~$8.27	~$2.23
Currency Status	Overvalued	Undervalued
Economic Signal	Safe haven strength	Post-reform volatility
Policy Challenge	Export competitiveness	Inflation control

The Big Mac Index doesn’t explain everything, but it provides a starting point for understanding deeper issues: - In Switzerland, strength isn't always an advantage. - In Egypt, devaluation brings both relief and pain.

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Final Thought

Whether you're a policymaker, investor, or curious global citizen, the Big Mac Index offers an accessible, consistent framework for thinking about currencies. Through case studies like these, we see how much a simple burger can reveal about a nation's economic journey.