Prices have fallen 49 per cent in Portugal over the last 12 months, making the country the cheapest for typical holiday spending items in a 10-nation list.
Including a three-course meal, sun cream and drinks, the items cost just 32.84 in Portugal, with Spain the next-cheapest country at 36.68. Of the 10 countries surveyed, the most expensive for the items was Malaysia at 47.68.
The survey by Post Office Travel Money also showed that foreign currencies against which the pound had fallen the most in the last 12 months were those of Malaysia, Australia, Thailand and South Africa. In contrast, British holidaymakers are now getting much-improved exchange rates for Hungary, Croatia, Bulgaria and the eurozone.
The Post Office said its fastest-growing currencies in terms of sales in 2010 compared with 2009 were those of Brazil, Mexico, Indonesia, Latvia and China.