THE POLISH zloty, among Europe's worst-performing currencies against the dollar in 2011, may turn into a winner for bond investors this year, the Economist's Big Mac Index indicates.

Measured by the cost of Big Mac hamburgers at McDonald’s restaurants, the zloty is undervalued by 43 per cent, the most in 18 months and the second-biggest discount in Europe after the Russian ruble, according to the long-running index.

Poland’s economy will grow five times faster than that of the euro region, the European Commission forecast in November.

The Big Mac index weights market exchange rates against those derived by comparing prices of McDonald’s flagship burger, drawing from a hypothesis that exchange rates should reflect relative price levels. – (Bloomberg)