What Louis Vuitton and chicken are telling us about Asian economies
The prices of European luxury goods shares and street food both provide useful cues about strength of economies in Asia.
Khoon Goh wouldn’t be the only Singapore resident who keeps a close eye on $3000 Louis Vuitton Chelsea boots and queues for chicken rice at a hawker stall.
For Goh though there is a professional edge: chicken rice is an excellent proxy for inflation in the island state and luxury goods are an accurate portent of economic activity. And Goh is ANZ’s head of Asia Research.
Having looked for a leading indicator of economic growth in regional Asia (ex Japan, China and India) for some years, he began to track the share prices of leading luxury brands whose popularity is growing with the middle and upper classes.
“The problem with traditional indicators, like export numbers or sales, is they are historic, not forward looking,” he tells Capital Brief.
