Over the past year, the South African rand has weakened about 9% versus the dollar and euro, and around 12% against the UK pound.
This makes South Africa a standout among its global peers, offering a high level of affordability for goods and services in relative terms.
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Three coffees for the price of one
“Consumers can drink nearly three cappuccinos in South Africa for the price of one in the US,” said Mary Curtis, a strategist at brokerage RMB Morgan Stanley, and Andrea Masia, an economist.
You could also get four nights for a standard double room in a Cape Town hotel (Hilton in this example) for the price of only one in London.
| Prices in USD ($1 = R18.76) |
SA | India | Brazil | USA | UK | Germany | France | Australia | Canada |
| Big Mac | 2.76 | 2.61 | 4.25 | 5.58 | 4.80 | 5.01 | 4.91 | 4.63 | 5.25 |
| Starbucks tall cappuccino | 2.12 | 3.72 | 2.40 | 5.95 | 5.40 | 4.35 | 5.41 | 3.66 | 5.92 |
| One night at a Hilton hotel | 96 | 153 | 176 | 421 | 427 | 298 | 352 | 255 | 159 |
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The Big Mac index
The table above also includes the cost of a Big Mac hamburger. The Big Mac Index is a widely recognised and well-known index that compares the price of a Big Mac in different countries.
The index was created by The Economist magazine in 1986 as a lighthearted way to measure the purchasing power parity (PPP) between countries.
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The Big Mac index is updated on a regular basis by The Economist, providing a snapshot of the state of the global economy and currency markets.
Cost wise, South Africa has the second-cheapest Big Mac in the comparison above, just behind India.
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The Big Mac Index is not a perfect measure of PPP as it only takes into account one item, and does not consider other aspects such as the cost of housing, transportation, and healthcare.
However, it provides a general overview of the relative affordability of goods and services in different countries.
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