The sad story behind the world’s cheapest Big Mac

LIMA, Peru — For a country known for standing up to US “imperialism,” Venezuela might be the most welcoming place on Earth for “gringo” tourists.

If you love Big Macs, that is.

Venezuela is now the cheapest place in the world to buy McDonald’s flagship double burger. That’s according to The Economist’s latest Big Mac index, which compares the dollar cost of the burger in different nations.

That’s some turnaround. In 2013, Venezuela was actually home to the planet's most expensive Big Mac, which cost just over $9. 

Now, it costs 132 bolivars — 67 US cents, according to the Economist. (Check out the full data set here.)

This ranking isn't just about burgers. People follow the Big Mac index to see things like different countries’ purchasing power, and how over- or undervalued their currency may be. But this time it's telling a bigger story about a country in deep trouble.

The price drop is only partly thanks to McDonald's own little discount last year. Most of it is due to a crazy run on the bolivar — in other words, panicky people racing to change their national currency into stronger US dollars. The currency most people are paid in is rapidly losing its worth. 

The plummeting Big Mac price in dollars shows just how loco Venezuela’s economic implosion is. 

The country's inflation rate is the highest in the world. Along with food shortages and one of the world’s worst violent crime waves, the monetary disarray has devastated Venezuela after 15 years of the late Hugo Chavez’s self-styled socialist revolution. 

The inflation has been caused partly by the government desperately printing money to keep up — temporarily — with its debt payments.

More from GlobalPost: Why Venezuela’s looking at a world of pain, in 2 easy charts 

The situation is so bad that in February the administration of Chavez’s handpicked successor, Nicolas Maduro, stopped publishing official inflation figures.

Yet even the Economist’s calculation is understating how bad things are, says Johns Hopkins professor Steve Hanke.

The exchange rate it's using, of 197 bolivars to the dollar, is “misleading,” he told GlobalPost. The current black market rate — the way ordinary Venezuelans buy greenbacks — is 646 bolivars to the dollar. That would make the real cost of a double burger at Mickey D's just 20 cents.

Hanke, a world expert on out-of-control inflation, puts Venezuela’s current inflation rate at around 675 percent.

The economy is coming dangerously close to what economists call “hyperinflation,” when prices jump 50 percent or more in a single month. If Venezuela passes that milestone, it would become just the 57th recorded instance in history.

“They’re toying with hyperinflation but it’s actually very hard to get into the rogues’ gallery, along with the other 56,” Hanke says.

But beyond the numbers, the impact on ordinary folks is devastating. Most have to spend their pay as soon as they receive it. Some also resort to bartering, especially in the countryside where many grow crops or rear livestock.

“It’s terrible,” says Hanke. “Ordinary people who rely on their salaries are just getting robbed.”

And even with the world’s cheapest Big Mac, increasingly few Venezuelans are able to afford McDonald’s.