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

King Salman Bearing Gifts: Implications for ASEAN, Oil-Refining and Religion

Indonesia: Democracy a Long Term Stabilizer, Despite Episodic Ructions

REAL-Economics.com

Macroeconomics

Indonesia's economy is poised to accelerate, as the export-led recovery spreads to domestic demand -- thus enabling real GDP to accelerate above 5.5% YoY growth through the rest of 2017. Exports are growing faster than most of Asia, and non-oil imports ended 15 consecutive quarters of contraction to grow 7.8% YoY in Oct16-Mar17, accelerating to 9.2% YoY in April 2017 -- suggestive of a steady improvement in domestic demand. Car sales were up 5.9% YoY in January-April 2017, suggesting moderately strong urban consumption, and bank loans accelerated to a 14-month high of 9.2% YoY growth in March 2017. The 4qma of the fiscal deficit moderated to 2.1% of GDP by March 2017, as the tax base was boosted by the second (final) round of asset disclosures of previously undisclosed income/assets. The strong start to the year for fiscal revenue (+19% YoY in 1Q 2017, in distinct contrast to the stagnation and decline of the past two years) should provide the wherewithal for infrastructure projects to move forward more rapidly this year. Cement consumption rose 5.5% YoY in April 2017, and cement sales were up 7% YoY (suggesting the likelihood of stronger consumption in subsequent months). With foreign reserves outpacing base money growth, the rupiah should retain a mild strengthening bias through the rest of the year. There is little scope for further policy rate cuts, given CPI inflation has edged up to 4.2% YoY, and the economy is set to accelerate on the back of stronger external and domestic demand. The latter, however, should allow a steady rebound in corporate earnings growth. Although the equity market's trailing P/E ratio of 18.5x is at the high end of its trading range of the past 8 years (i.e., the market is unequivocally expensive), we recommend staying mildly Overweight Indonesia on a 6-month view.

Indonesia's economy is poised to accelerate, as the export-led recovery spreads to domestic demand -- thus enabling real GDP to accelerate above 5.5% YoY growth through the rest of 2017. Exports are growing faster than most of Asia, and non-oil imports ended 15 consecutive quarters of contraction to grow 7.8% YoY in Oct16-Mar17, accelerating to 9.2% YoY in April 2017 -- suggestive of a steady improvement in domestic demand. Car sales were up 5.9% YoY in January-April 2017, suggesting moderately strong urban consumption, and bank loans accelerated to a 14-month high of 9.2% YoY growth in March 2017. The 4qma of the fiscal deficit moderated to 2.1% of GDP by March 2017, as the tax base was boosted by the second (final) round of asset disclosures of previously undisclosed income/assets. The strong start to the year for fiscal revenue (+19% YoY in 1Q 2017, in distinct contrast to the stagnation and decline of the past two years) should provide the wherewithal for infrastructure projects to move forward more rapidly this year. Cement consumption rose 5.5% YoY in April 2017, and cement sales were up 7% YoY (suggesting the likelihood of stronger consumption in subsequent months). With foreign reserves outpacing base money growth, the rupiah should retain a mild strengthening bias through the rest of the year. There is little scope for further policy rate cuts, given CPI inflation has edged up to 4.2% YoY, and the economy is set to accelerate on the back of stronger external and domestic demand. The latter, however, should allow a steady rebound in corporate earnings growth. Although the equity market's trailing P/E ratio of 18.5x is at the high end of its trading range of the past 8 years (i.e., the market is unequivocally expensive), we recommend staying mildly Overweight Indonesia on a 6-month view. 

Indonesia: Domestic Demand Provides a Spur at Last