Israel Surges to Second Place in The Economist's Big Mac Index

Israel's economy has made a significant leap in the Big Mac Index, published by The Economist. In the latest ranking, Israel took second place globally, just behind Switzerland. This is a six-place jump from its previous position in January, where it was ranked eighth.

The two main factors contributing to this surge are a 15% price hike for McDonald's Big Mac in Israel and the appreciation of the shekel against the US dollar. In January, the price of a Big Max was NIS 20, equivalent to $6.36 at the exchange rate used by The Economist. However, after McDonald's Israel raised its prices by 15% in February, the cost of a Big Mac climbed to $7.40.

The Big Mac Index is based on the principle of purchasing power parity, which suggests that the same product should have the same price in different countries when converted to the same currency. However, when a Big Mac costs more in Israel than in the US in dollar terms, it can indicate that the shekel is overvalued or local prices are too high.