Big Mac Index Reveals Arab Currencies Significantly Undervalued, With Kuwaiti Dinar 21.5% Underpriced

According to The Economist’s Big Mac Index, the real purchasing power of several Arab currencies is considerably higher than their current trading values. Notably, the Kuwaiti dinar is undervalued by about 21.5% compared to its actual worth. The index, which estimates the real exchange rate by comparing the price of a Big Mac in each country’s currency with its US price, shows a considerable gap between the official and real values across the region. For instance, the Egyptian pound is undervalued by 53.6%, the Omani riyal by 31.4%, the Qatari riyal by 28.8%, the Bahraini dinar by 22.1%, the UAE dirham by 15.4%, and the Saudi riyal by 12.5%. Even the Lebanese pound, widely regarded as the world’s weakest currency, has a real value that is approximately 7.4% higher than its official price. Other Arab countries are similarly affected, with Jordan’s currency showing a 39.1% undervaluation. Despite their apparent strength against the dollar, these findings suggest that many Arab currencies, including those in the Gulf region, are trading at values significantly lower than their true economic worth.