Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

PK Basu has 34 years experience covering Asia's economies and markets (equities, fixed income and currencies), including 20 years covering the global economy. He was Chief Economist (SE Asia & India) at Credit Suisse First Boston for 5 years, and Chief Asia (x-Jpn) Economist at Daiwa Securities for a similar period. Among other roles, he was global head of research at Maybank Kim Eng, Malaysia equity research head and chief ASEAN economist at Macquarie, Chief Economist at ICICI Securities, ASEAN economist at UBS and the first chief economist at Khazanah Nasional (where he was co-head of research, and led all agri-business initiatives). PK Basu started his career in the Asia Service of WEFA (Wharton Econometrics) in Philadelphia in 1990, rising to be Director of their Asia Service in June 1994. 
PK's book, "Asia Reborn: A continent rises from the ravages of Colonialism and War to a New Dynamism" won the Tata Literature First Book Award (non-fiction) for 2018. It is the first single chronicle of the modern economic and political history of the whole of Asia (from Iraq and Turkey to Korea and Japan, and everything in between), told from an Asian perspective.

Chief Economist & Political Strategist

Economic Recovery Is Gaining Momentum, but Monetary Stimulus Would Help

India's 2020 Reforms Will Usher in a Decade of Spectacular Growth from 2021 On

Modi's Blitz of Economic Reform Will Transform Farm Sector and Labour Market

India: Economy Recovering, but Valuations Are Stretched as Covid Hits EPS Growth

Big Bang Reforms, Support for Consumers & Flexible Labour to Boost India

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

Exports (+6% YoY) and industrial output (+0.2% YoY) resumed growing in September 2020, GST revenues were up 4% YoY that month and accelerated to 10% YoY growth in October 2020. We expect real GDP to expand 3% YoY in Oct-Dec 2020 and accelerate to 8% YoY in Jan-Mar 2021 (aided by a low-base effect, especially for March 2020); so real GDP will contract about 3% in FY2020/21 (much better than the IMF estimate of -10.5%) and expand over 10% in 2021/22 . With WPI inflation extremely low (as fuel prices are down YoY) and CPI inflation high (because of supply disruptions), corporate profitability is likely to be improving after the collapse in March-July. We recommend being Overweight India equities.  
India's exports grew 6% YoY in September 2020, and the long industrial recession ended in September, with industrial output expanding 0.2% YoY led by good growth in consumer non-durables (+4.1% YoY) and consumer durables (+2.8% YoY), and modest growth in infrastructure goods (+0.7% YoY). Reflecting the strength of farm incomes (and the positive impact of the on-going reforms to agricultural pricing and distribution), tractor sales expanded 31.2% YoY in 3Q 2020. Responding to the labour reforms, the pace of relocation of manufacturing FDI from China to India is gaining pace, with notable new investments from German and Japanese companies -- likely to gain further momentum in the period ahead. That GST revenues were up 4% YoY in September and 10% YoY in October 2020 is clinching evidence of the acceleration in economic activity. The "stimulus 3.0" announced on 12 November will boost employment and exports, and provide a modest spur to additional bank lending. 
Reflecting the relative sluggishness of domestic demand (with bank credit growing an anaemic 5.1% YoY in October 2020), imports declined far more than exports (even in April-August 2020), and the current account surplus widened from 0.1% of GDP in Jan-Mar 2020 to 3.9% of GDP in Apr-Jun 2020. Although imports contracted less in Jul-Sep 2020, the still-low trade deficit that quarter will ensure a current account surplus of 3.5% of GDP for 3Q 2020 (calendar year) and a full-year current account surplus of over 2% of GDP (close to the all-time high of FY2003/04). Given the healthy external balance, there is ample room for the RBI to ease monetary policy further. The high headline CPI inflation rate remains the main impediment. Over the next 2 months, the easing of Covid-19 infections across the country (with current new case numbers less than half the mid-September peak) will allow the RBI to cut the policy interest rate a further 100bp to an all-time low by March 2021. That should ensure an acceleration of real GDP to 8% YoY in Jan-Mar2021, and to over 10% growth in FY2021/22.

Exports (+6% YoY) and industrial output (+0.2% YoY) resumed growing in September 2020, GST revenues were up 4% YoY that month and accelerated to 10% YoY growth in October 2020. We expect real GDP to expand 3% YoY in Oct-Dec 2020 and accelerate to 8% YoY in Jan-Mar 2021 (aided by a low-base effect, especially for March 2020); so real GDP will contract about 3% in FY2020/21 (much better than the IMF estimate of -10.5%) and expand over 10% in 2021/22 . With WPI inflation extremely low (as fuel prices are down YoY) and CPI inflation high (because of supply disruptions), corporate profitability is likely to be improving after the collapse in March-July. We recommend being Overweight India equities.  
India's exports grew 6% YoY in September 2020, and the long industrial recession ended in September, with industrial output expanding 0.2% YoY led by good growth in consumer non-durables (+4.1% YoY) and consumer durables (+2.8% YoY), and modest growth in infrastructure goods (+0.7% YoY). Reflecting the strength of farm incomes (and the positive impact of the on-going reforms to agricultural pricing and distribution), tractor sales expanded 31.2% YoY in 3Q 2020. Responding to the labour reforms, the pace of relocation of manufacturing FDI from China to India is gaining pace, with notable new investments from German and Japanese companies -- likely to gain further momentum in the period ahead. That GST revenues were up 4% YoY in September and 10% YoY in October 2020 is clinching evidence of the acceleration in economic activity. The "stimulus 3.0" announced on 12 November will boost employment and exports, and provide a modest spur to additional bank lending. 
Reflecting the relative sluggishness of domestic demand (with bank credit growing an anaemic 5.1% YoY in October 2020), imports declined far more than exports (even in April-August 2020), and the current account surplus widened from 0.1% of GDP in Jan-Mar 2020 to 3.9% of GDP in Apr-Jun 2020. Although imports contracted less in Jul-Sep 2020, the still-low trade deficit that quarter will ensure a current account surplus of 3.5% of GDP for 3Q 2020 (calendar year) and a full-year current account surplus of over 2% of GDP (close to the all-time high of FY2003/04). Given the healthy external balance, there is ample room for the RBI to ease monetary policy further. The high headline CPI inflation rate remains the main impediment. Over the next 2 months, the easing of Covid-19 infections across the country (with current new case numbers less than half the mid-September peak) will allow the RBI to cut the policy interest rate a further 100bp to an all-time low by March 2021. That should ensure an acceleration of real GDP to 8% YoY in Jan-Mar2021, and to over 10% growth in FY2021/22.    

DSP BlackRock Liquidity Fund (DSLQYDG IN)

India: Strengthening Recovery Will Defy the IMF's Pessimism on FY2020/21 Growth