Economists point out the best overseas holiday destinations

PLANNING a holiday? If you want to get bang for your buck, these are the countries you should be planning to visit — or risk paying too much.

The best holiday to go on right now

EXCLUSIVE

ECONOMISTS have revealed the overseas holiday destinations likely to get cheaper in the year ahead as our currency appreciates against theirs.

Japan, Brazil and Europe — particularly Greece, if it leaves the single currency — are the top picks for those planning an international jaunt. And where do they say you’ll get less bang for your buck? The United States.

For those wanting to go now, Russia offers the best value, with the Aussie dollar buying 30 per cent more roubles than 12 months ago.

One of the nation’s most respected economists, Colonial First State chief soothsayer Stephen Halmarick, said the European Central Bank and the Bank of Japan would likely have to expand “quantitative easing” — that is, print more money. This is what monetary policy mandarins do to boost an economy when interest rates are already set to zero per cent.

JUNE 14 2015 DEALS Visit New York on a tour of the US East Coast. For use with Trafalgar copy. Picture: Supplied

It will have the effect of reducing the relative attractiveness of yen and euro-denominated assets such as bonds and therefore cause those currencies to drop.

“I think both the Bank of Japan and European Central Bank will need to do more quantitative easing in the next year, further lowering interest rates and weakening their currencies,” Mr Halmarick said.

On the flip side, Mr Halmarick said the US was likely to start raising interest rates as soon as September, which would push up the value of the greenback, and drag with it pegged currencies such as China’s.

James White, who co-authored with Mr Halmarick a guide called the Travelling Economist, put Brazil at the top of his value-list. He factored in not only currency fluctuations, but buying power. This is particularly good news for those contemplating a trip to the 2016 Olympics in Rio de Janeiro.

John and Kate Rolfe in southern Bolivia as part of a 2002 South American holiday prompted by the value on offer as those nations experienced economic crisis. Picture: Supplied

The Aussie dollar has already improved by about 15 per cent against Brazil’s currency, the real, in 2015.

Japan was also recommended by Mr White, along with Mexico and Europe.

CommSec chief economist Craig James said Greece would become a bargain if it ditched the euro for a new version of its old unit, the drachma.

“More than likely, if the new drachma came into being its value would plunge,” Mr James said.

“As a result, everyone around the world would have their holidays in Greece.

“That would be good for Greece — they would have money coming in,” Mr James said.

It is as yet unclear whether Greece will bring back the drachma should it leave — or be booted — from the eurozone.

Mykonos Town Picture: Istock

For those looking for a bargain right now, Russia appears a good option. Setting aside warzones, it is the country the Australian dollar has appreciated the most in the past 12 months, data from currency comparison site Oanda shows.

According to the most recent Big Mac index by The Economist magazine, the rouble is the world’s second-most undervalued currency. India, Malaysia and Indonesia are also substantially undervalued. Switzerland was the most overvalued, followed by Norway.