Indonesia GDP numbers more exciting after rebasing exercise

Market prices were up 2.2% YoY.

Most high frequency indicators like PMIs, credit growth, industrial production and non-oil, non-gold import trends all pointed to a subdued growth environment, except for the GDP market prices.

According to a report by DBS, GDP numbers for the Dec14 quarter and advance estimates for FY15 due on Monday (9 Feb), will attract more than routine interest. This is after the recent rebasing exercise pushed up GDP market prices to 5.1% (vs 4.5% prev) in FY12/13 and sharply to 6.9% (vs 4.7%) in FY13/14.

Nonetheless, focus will be revised data for the first three quarters of current fiscal year 14/15, to gain a clearer picture of the underlying growth momentum.

Here’s more from DBS:

Under the earlier-used factor prices assumption, our GDP estimate for FY14/15 stood at 5.6%. A shift to the market price gauge will lead to an increase of about 40bp (last five-year average), leaving our estimate up at 5.9%. Adding the wider coverage of industries and sectors, there is likely to be an upside bias to the Monday’s advance GDP estimate for FY14/15. The resultant impact on the nominal GDP numbers will dictate the impact on the current balance and fiscal ratios for the year.

Henceforth, GDP at market prices will be released as the main gauge for growth (instead of factor prices) and released along with the Gross Value added (GVA) at basic prices. Other changes include expansion in the basket to incorporate previously under-represented and informal sectors.