Big Mac Index: No happy meal for SA
The Economist has put South Africa below 40 other countries on the Big Mac Index.
JOHANNESBURG - South Africa is second from the bottom on the Economist magazine's latest "Big Mac Index", which measures how global currencies perform against each other.
The index compares the price of a McDonald’s burger across the world and is a light-hearted and not-quite precise way to measure whether currencies are under or overvalued.
South Africa's position above India, but below around forty other countries, means the rand is undervalued against the US dollar and the Euro.
This means the currency is not performing as well as it should be.
Economist Dawie Roodt said, “The value of the currency is quite weak and actually that means we are all a little bit poorer than what we’re supposed to be.”
Roodt also said his own invention, the "Big Bang Index”, compares the price of prostitution in different countries and supports the results found in the Economist's "Burgernomics".
The most over-valued currencies belong to countries like Sweden, Norway and Switzerland.
SOUTH AFRICAN ECONOMY
According to the Mail & Guardian
, high levels of consumer debt have caused the National Treasury to consider tightening lending regulations and abolish garnishee orders.
But, the days of reckless lenders appear to be numbered as government can no longer ignore the debt problem.
Even with the intended safeguards, such as the National Credit Act and the Magistrates Act, these have proved ineffective in saving consumers from lenders and themselves.
In 2012, the Treasury and the Banking Association of South Africa agreed to discuss several measures to improve responsible lending.
(Edited by Katleho Mogase)