Bic Mac Index – czk is too strong

The famous burger and the governor of the Czech National Bank have a thing in common – they both demonstrate that the Czech currency is too strong. Meanwhile the second said that it will be necessary to lower the interest rates in August if the corona won’t stop strengthening, the first one simply demonstrates by its price something is not right.

The price of the burger in the USA is 3,57$, but a Czech BicMac costs 4,56$, a dollar more. An important thing to mention – in 2000 the price was half the price in the USA. The burger prices were 1:1, when the dollar sells for 18,50 czk, but right now the price is 15,39. That means the czk is overestimated towards the usd by 28%.

We have caught up with the US in the price, but salaries are a different thing. A new employee of the CR branch of Mac Donald’s earns 0,85 of Big Mac an hour, in the US it is for the same job 2,59 of the burger.