The Big Mac index: Taiwan

Macro

2026-09-01

Description

The big mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.

Published by
The Economist
Frequency
Aperiodically
Next Update
Hashtags
Big Mac index PPP

AI Data Insight

In the first quarter of 2026, Taiwan's Big Mac Index dropped to $2.4725, a significant decline from the previous value of $2.6624, indicating that the New Taiwan Dollar exchange rate has been severely undervalued over the long term. This not only reflects that Taiwan's burger prices are among the cheapest globally but also highlights the exchange rate divergence phenomenon caused by massive capital outflows despite the huge trade surplus of the technology sector. The market calls for vigilance against this potential structural risk of sacrificing domestic purchasing power to support exports.

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AI Data Insight

In the first quarter of 2026, Taiwan's Big Mac Index dropped to $2.4725, a significant decline from the previous value of $2.6624, indicating that the New Taiwan Dollar exchange rate has been severely undervalued over the long term. This not only reflects that Taiwan's burger prices are among the cheapest globally but also highlights the exchange rate divergence phenomenon caused by massive capital outflows despite the huge trade surplus of the technology sector. The market calls for vigilance against this potential structural risk of sacrificing domestic purchasing power to support exports.

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Macro
Description

The big mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.

Published by
The Economist
Frequency
Aperiodically
Next Update
Hashtags
Big Mac index PPP