Big Mac index an accurate indicator

KUALA LUMPUR - So what's the big deal about the price of Big Macs?

For one, the relatively cheap price for a Big Mac here reflects that prices of food items in Malaysia are not what they are being made out to be.

Independent economic macro-analyst Prof Dr Hoo Ke Ping said while it was true that some might find prices of food items to have risen somewhat, Malaysians should be thankful that they can still enjoy relatively cheap meals compared with other countries.

He said the Big Mac index was proof that essential items in the country were still relatively cheaper than other countries.

"Although some prices of food items, petrol and electricity have gone up, our prices are still cheap."

Hoo said it was a misconception that prices of essential items had gone up, adding the speculation was sensationalised, over-hyped and not fully defined.

The fluctuation of prices in food items depends on various factors, such as the weather, growing conditions and changes in regulations, as well as subsidies, he said.

"For example, the price of rice is cheap because of the flood of Thai rice into the market.

"Compared with international standards, the cost of healthcare and education is still relatively cheap. Even with the cut in petrol subsidies, we still enjoy cheaper petrol prices than other countries."

Accountant Muhammad Aiman Sofian said lower salary levels in Malaysia meant that the ratio of expenses to income was smaller compared with other countries.