Asia's economic sleuths hunt for clues in odd places

Singapore, Apr 2: The truth is out there but economists in Asia have to look in some strange places to find it.

Faced with irregular, sometimes dodgy economic data, analysts turn to cement sales, fast food, newspaper sizes or just about anything that helps them understand the fast-growing and often volatile region.

While those who track economies such as France and Britain receive a regular diet of numbers which officials have gone through with fine-toothed combs, analysts in Asia find statistics are patchy or even open to manipulation.

''No single piece of data tells the whole story,'' said Rajeev Malik, an economist at J.P. Morgan Chase, who looks at India's gold purchases, air traffic and restaurant queues to get a feel for sentiment in an economy that is surging.

''One has to be a detective and piece things together.'' Some unusual numbers reveal trends sooner than official data.

Take, for example, motorbikes in Indonesia. They're a cheap alternative to unreliable public transportation. As such they serve as a barometer of consumer spending across the sprawling archipelago, as well as a leading indicator for growth.

Last September, economists such as Song Seng Wun noticed a big pick-up in motorcycle sales following months of weak sales because of high fuel costs and interest rates.

The change was an early sign that a central bank move to trim rates was finally affecting consumers. The gains eventually showed up in fourth-quarter gross domestic product, which had its fastest growth rate in two years.

''It's about finding an indicator that captures economic activities at the simplest level,'' said Song of CIMB-GK Research.

Use Your Imagination

Official data may fail to capture some informal activity the smuggling of pirated discs, for example for countries such as the Philippines, Indonesia and China, Song said.

HSBC Asia-Pacific economist Frederic Neumann, who also watches Indonesian motorcycle sales, said that with so many holes in data across Asia, economists need to be creative.

Neumann designed a ''champagne indicator'', a gauge based on French champagne exports, which he says foreshadowed Thailand's 1997 currency crisis, the one that started the Asia crisis.

''Champagne consumption tends to peak about two quarters before a crisis hits. People become risk seekers, and they are more likely to make mistakes.'' Indeed, he says, champagne consumption soared in Thailand just before the country's collapse.

Reuters